NOTICESMembership of the Departmental Performance Review Board, 445652018-18969Committee for PurchaseCommittee for Purchase From People Who Are Blind or Severely DisabledNOTICESProcurement List; Additions and Deletions, 44604-446072018-190052018-190062018-19007ComptrollerComptroller of the CurrencyRULESLiquidity Coverage Ratio:Treatment of Certain Municipal Obligations as High-Quality Liquid Assets, 44451-444552018-18610Defense DepartmentDefense DepartmentSee

The Department of Homeland Security (DHS) is increasing the premium processing fee charged by U.S. Citizenship and Immigration Services (USCIS). DHS is increasing the fee by 14.92 percent, the percentage change in inflation since the fee was last adjusted in 2010 according to the Consumer Price Index for All Urban Consumers (CPI-U). The adjustment increases the fee from $1,225 to $1,410.

DATES:

This rule is effective on October 1, 2018. Applications postmarked on or after that date must include the new fee.

The Immigration and Nationality Act (INA) permits certain employment-based immigration benefit applicants and petitioners to request, for a fee, premium processing. The applicable statute authorizes the Secretary of Homeland Security (Secretary) to charge and collect a premium processing fee for employment-based petitions and applications. The fee must be used to provide certain premium-processing services to business customers, and to make infrastructure improvements in the adjudications and customer service processes. By statute, the fee, initially set at $1,000, must be paid in addition to any normal petition/application fee that may be applicable. The statute provides that the Secretary may adjust this fee according to the Consumer Price Index. INA section 286(u), 8 U.S.C. 1356(u); Public Law 106-553, App. B, tit. I, sec. 112, 114 Stat. 2762, 2762A-68 (Dec. 21, 2000).

Premium processing allows filers to request 15-day processing of certain employment-based immigration benefit requests if they pay an extra amount. See 8 CFR 103.7(b)(1)(i)(SS) and (e). The premium processing fee is paid in addition to the base filing fee and any other applicable fees. See 8 CFR 103.7(b)(1)(i)(SS)(1). It cannot be waived. See 8 CFR 103.7(b)(1)(i)(SS)(3). USCIS uses premium processing fee revenue to improve its adjudications and customer service processes, fund the costs of providing the premium services, and modernize its information technology systems.

Consistent with INA section 286(u), 8 U.S.C. 1356(u), DHS has calculated the percent change in the CPI-U to measure inflation. For the end point for the period of inflation to establish the current premium processing fee, DHS used the Consumer Price Index-Urban Consumers (CPI-U) as of June 2010. See 75 FR 58961. Accordingly, we have used July 2010 as the starting point for this change. In July 2010 the CPI-U was 218.01, and in April 2018 it was 250.55.2 Therefore, between July 2010 and April 2018, the CPI-U increased by 14.92 percent.3 When the percentage increase is applied to the current premium processing fee of $1,225, the adjusted premium processing fee is $1,408 ($1,410 when rounded to the nearest $5 increment). Thus, under INA section 286(u), 8 U.S.C. 1356(u), the USCIS premium processing fee will be $1,410. See final 8 CFR 103.7(b)(1)(i)(SS).

1See also USCIS, How Do I Use the Premium Processing Service, https://www.uscis.gov/forms/how-do-i-use-premium-processing-service (last reviewed/updated Oct. 3, 2017, last visited June 7, 2018).

2 The latest CPI-U data is available at http://data.bls.gov/cgi-bin/surveymost?bls. Select CPI for All Urban Consumers (CPI-U) 1982-84=100 (Unadjusted)—CUUR0000SA0 and click the Retrieve data button.

3 We calculated this by subtracting the July 2010 CPI-U (218.01) from the April 2018 CPI-U (250.55). We divided the result (32.54) by the July 2010 CPI-U (218.01). Calculation: (250.55−218.01)/218.01 = 14.92 percent.

USCIS intends to use the premium funds that are generated by the fee increase to provide certain premium-processing services to business customers, and to make infrastructure improvements in the adjudications and customer-service processes. In recent years, premium processing has been suspended on employment-based petitions to permit officers working on premium processing cases to process long-pending non-premium filed petitions as well as to prevent a lapse in employment authorization for beneficiaries of extension petitions resulting from the high volume of incoming petitions and a significant surge in premium processing requests.4The additional staff hired through the premium funds will allow USCIS to provide premium processing service with less disruption and improve the adjudications and customer service process. USCIS also plans to make adequate investment in information technology systems that will improve the adjudications process and the services provided to applicants and petitioners.

A request for premium processing postmarked on or after October 1, 2018 must include the new fee. Petitioners must pay the $1,410 fee in addition to and separate from other filing fees. 8 CFR 103.7(b)(1)(i)(SS)(1). The premium processing fee may not be waived. 8 CFR 103.7(b)(1)(i)(SS)(3).5

III. Regulatory Requirements

5 This rule also makes a technical correction to the authority citation for 8 CFR part 103. In a previous DHS rule, a citation to 48 U.S.C. 1806 was inadvertently removed. See 76 FR 53764, 53780. This rule reinserts that citation.

A. Administrative Procedure Act

DHS is making this fee increase final without notice and comment because it is unnecessary. 5 U.S.C. 553(b)(B). By law, DHS may adjust the premium processing fee for inflation according to the Consumer Price Index. See INA section 286(u), 8 U.S.C. 1356(m). DHS has previously established by regulation that DHS may adjust the fee annually by notice. 8 CFR 103.7(b)(1)(i)(SS)(2). No comments were received on the USCIS Fee Schedule; Final Rule regarding USCIS's authority to adjust the premium processing fee for inflation in the future. See 75 FR 58961-58991. The amount of the increase would not be changed by public comment. The sole exercise of discretion here relates to the determination whether, as a matter of internal agency management, DHS and USCIS needs additional premium processing fee revenue to provide premium processing services and to make infrastructure improvements in the adjudications and customer-service processes as authorized by INA 286(u), 8 U.S.C. 1356(u), and whether, as a procedural matter, payment of such increased fee will be a precondition for receiving the premium processing service. Therefore, further delay of this regulation change to solicit public comments is unnecessary.

B. Other Regulatory Requirements

Because this action is not subject to the notice-and-comment requirements under the APA, a final regulatory flexibility analysis is not required. See 5 U.S.C. 604(a). In addition, this rule is not a “major rule” as defined by the Congressional Review Act, 5 U.S.C. 804(2), and thus is not subject to a 60-day delay in the rule becoming effective. This action is not subject to the written statement requirements of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. L. 104-4). Nor does it require prior consultation with State, local, and tribal government officials as specified by Executive Orders 13132 or 13175. This rule also does not require an Environmental Assessment (EA) or Environmental Impact Statement (EIS). 40 CFR 1507.3(b)(2)(ii) and 1508.4. This action does not affect the quality of the human environment and fits within Categorical Exclusion number A3(d) in Dir. 023-01 Rev. 01, Appendix A, Table 1, for rules that interpret or amend an existing regulation without changing its environmental effect.

Finally, this action does not require review by the Office of Management and Budget (OMB) under Executive Orders 12866 and 13563. As previously discussed, DHS has the authority to adjust the premium processing fees according to the CPI-U. DHS is adjusting the premium processing fee by 14.92 percent resulting in an increase of $185 per Form I-907 (from a fee of $1,225 per premium processing Form I-907 to $1,410 per Form I-907). Table 1 shows the total number of premium processing Forms I-907 received by USCIS from fiscal year 2013 to 2017. On average, USCIS received 238,784 Forms I-907 annually during this timeframe.

DHS estimates an additional annual $44 million in revenue to be collected from the increase in premium processing fees due to adjustment of inflation.6 As discussed earlier, the premium processing fee revenue will be used to make infrastructure improvements in the adjudications and customer service processes as well as to fund the cost of providing premium services.

Office of the Comptroller of the Currency (OCC), Treasury; Board of Governors of the Federal Reserve System (Board); and Federal Deposit Insurance Corporation (FDIC).

ACTION:

Interim final rule with request for comment.

SUMMARY:

The OCC, the Board, and the FDIC (collectively, the agencies) are jointly issuing and inviting comment on an interim final rule that amends the agencies' liquidity coverage ratio (LCR) rule to treat liquid and readily-marketable, investment grade municipal obligations as high-quality liquid assets (HQLA). Section 403 of the Economic Growth, Regulatory Relief, and Consumer Protection Act amends section 18 of the Federal Deposit Insurance Act and requires the agencies, for purposes of their LCR rule and any other regulation that incorporates a definition of the term “high-quality liquid asset” or another substantially similar term, to treat a municipal obligation as HQLA (that is a level 2B liquid asset) if that obligation is, as of the LCR calculation date, “liquid and readily-marketable” and “investment grade.”

DATES:

The interim final rule is effective on August 31, 2018. Comments on the interim final rule must be received by October 1, 2018.

ADDRESSES:

Comments should be directed to:

OCC: Commenters are encouraged to submit comments through the Federal eRulemaking Portal or email, if possible. Please use the title “Liquidity Coverage Ratio Rule: Treatment of Certain Municipal Obligations as High-Quality Liquid Assets” to facilitate the organization and distribution of the comments. You may submit comments by any of the following methods:

• Federal eRulemaking Portal—“Regulations.gov”: Go to www.regulations.gov. Enter “Docket ID OCC-2018-0013” in the Search box and click “Search.” Click on “Comment Now” to submit public comments. Click on the “Help” tab on the Regulations.gov home page to get information on using Regulations.gov, including instructions for submitting public comments.

Instructions: You must include “OCC” as the agency name and “Docket ID OCC-2018-0013” in your comment. In general, OCC will enter all comments received into the docket and publish the comments on the Regulations.gov website without change, including any business or personal information that you provide such as name and address information, email addresses, or phone numbers. Comments received, including attachments and other supporting materials, are part of the public record and subject to public disclosure. Do not include any information in your comment or supporting materials that you consider confidential or inappropriate for public disclosure.

You may review comments and other related materials that pertain to this rulemaking action by any of the following methods:

• Viewing Comments Electronically: Go to www.regulations.gov. Enter “Docket ID OCC-2018-0013” in the Search box and click “Search.” Click on “Open Docket Folder” on the right side of the screen. Comments and supporting materials can be viewed and filtered by clicking on “View all documents and comments in this docket” and then using the filtering tools on the left side of the screen. Click on the “Help” tab on the Regulations.gov home page to get information on using Regulations.gov. The docket may be viewed after the close of the comment period in the same manner as during the comment period.

• Viewing Comments Personally: You may personally inspect comments at the OCC, 400 7th Street SW, Washington, DC 20219. For security reasons, the OCC requires that visitors make an appointment to inspect comments. You may do so by calling (202) 649-6700 or, for persons who are deaf or hearing-impaired, TTY, (202) 649-5597. Upon arrival, visitors will be required to present valid government-issued photo identification and submit to security screening in order to inspect comments.

Board: When submitting comments, please consider submitting your comments by email or fax because paper mail in the Washington, DC area and at the Board may be subject to delay. You may submit comments, identified by Docket No. R-1616 and RIN 7100-AF10, by any of the following methods:

Instructions: All public comments will be made available on the Board's website at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as submitted, unless modified for technical reasons or to remove personally identifiable information at the commenter's request. Accordingly, comments will not be edited to remove any identifying or contact information. Public comments may also be viewed electronically or in paper in Room 3515, 1801 K Street NW (between 18th and 19th Streets NW), Washington, DC 20006 between 9:00 a.m. and 5:00 p.m. on weekdays. For security reasons, the Board requires that visitors make an appointment to inspect comments. You may do so by calling (202) 452-3684. Upon arrival, visitors will be required to present valid government-issued photo identification and to submit to security screening in order to inspect and photocopy comments.

FDIC: You may submit comments, identified by FDIC RIN 3064-AE77, by any of the following methods:

• Hand Delivery: Comments may be hand-delivered to the guard station at the rear of the 550 17th Street NW building (located on F Street), on business days between 7:00 a.m. and 5:00 p.m.

• Email: comments@FDIC.gov.

Instructions: Comments submitted must include “FDIC” and “RIN 3064-AE77.” Comments received will be posted without change to http://www.FDIC.gov/regulations/laws/federal/, including any personal information provided.

The Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (Board), and the Federal Deposit Insurance Corporation (FDIC) (collectively, the agencies) adopted the liquidity coverage ratio (LCR) rule 1 in 2014. The LCR rule established a quantitative liquidity requirement that is designed to promote the short-term resilience of the liquidity risk profile of large and internationally active banking organizations. The intent of the agencies in issuing the LCR rule was to improve the banking sector's ability to absorb shocks arising from financial and economic stress and the measurement and management of liquidity risk.2 The LCR rule generally applies to a bank holding company, savings and loan holding company, or depository institution if: (1) It has total consolidated assets equal to $250 billion or more; (2) it has total consolidated on-balance sheet foreign exposure equal to $10 billion or more; or (3) it is a depository institution with total consolidated assets equal to $10 billion or more and is a consolidated subsidiary of a firm that is subject to the LCR rule (each, a covered company).3 Covered companies generally must maintain an amount of high-quality liquid assets (HQLA) equal to or greater than their projected total net cash outflows over a prospective 30 calendar-day period.4 The LCR rule defines three categories of HQLA—level 1, level 2A, and level 2B liquid assets—and sets forth qualifying criteria for HQLA and limitations for an asset's inclusion in the HQLA amount.

4 The Board separately adopted a modified LCR requirement for bank holding companies and certain savings and loan holding companies that, in each case, (A) have $50 billion or more in total consolidated assets and (B) are not internationally active (each, a modified LCR holding company). Under the Board's LCR rule, modified LCR holding companies must maintain an amount of HQLA equal to or greater than 70 percent of their projected total net cash outflows on the last business day of the applicable calendar month. 12 CFR 249 subpart G. This interim final rule's changes to the Board's LCR rule also apply to modified LCR holding companies.

In 2016, the Board amended its LCR rule to include certain U.S. municipal securities as HQLA, subject to certain limitations (2016 Amendments).5 To qualify as level 2B liquid assets under the 2016 Amendments, the U.S. municipal securities must be general obligation securities of public sector entities (i.e., a state, local authority, or other governmental subdivision below the U.S. sovereign entity level).6 Under the 2016 Amendments, a general obligation is defined as a bond or similar obligation that is backed by the full faith and credit of a public sector entity.7 To be treated as HQLA, the general obligation securities also must: (1) Be investment grade under 12 CFR part 1 as of the calculation date; (2) be issued or guaranteed by a public sector entity whose obligations have a proven record as a reliable source of liquidity in repurchase or sales markets during stressed market conditions; 8 and (3) not be an obligation of a financial sector entity or a financial sector entity's consolidated subsidiary, unless it is only guaranteed by a financial sector entity or its consolidated subsidiary and otherwise eligible.9 The 2016 Amendments limited the inclusion of general obligation securities in the HQLA amount to 5 percent of the covered company's total HQLA amount.10 The 2016 Amendments also limited the inclusion of general obligation securities of any single public sector entity to two times the average daily trading volume during the previous four quarters of all general obligation securities issued by that public sector entity.11

5 81 FR 21223 (April 11, 2016), codified at 12 CFR part 249 (Board).

6 12 CFR 249.20(c)(2).

7 12 CFR 249.3.

8 This is demonstrated by (A) the market price of the security or equivalent securities of the issuer declining by no more than 20 percent during a 30 calendar-day period of significant stress or (B) the market haircut demanded by counterparties to secured lending and secured funding transactions that are collateralized by the security or equivalent securities of the issuer increasing by no more than 20 percentage points during a 30 calendar-day period of significant stress. 12 CFR 249.20(c)(2).

9Id.

10 12 CFR 249.21.

11 12 CFR 249.22(c).

The Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) was enacted on May 24, 2018.12 Section 403 of the EGRRCPA amends section 18 of the Federal Deposit Insurance Act 13 and requires the agencies, for purposes of the LCR rule and any other regulation that incorporates a definition of the term “high-quality liquid asset” or another substantially similar term, to treat a municipal obligation as HQLA that is a level 2B liquid asset if that obligation is, as of the calculation date, (A) liquid and readily-marketable and (B) investment grade. Section 403 defines “investment grade” as having the meaning given the term in § 1.2 of title 12, Code of Federal Regulations, or any successor thereto. Section 403 defines “liquid and readily-marketable” as having the meaning given the term in § 249.3 of title 12, Code of Federal Regulations, or any successor thereto. Section 403 defines “municipal obligation” as “an obligation of—(i) a State or any political subdivision thereof; or (ii) any agency or instrumentality of a State or any political subdivision thereof.”

12 Public Law 115-174, 132 Stat. 1296-1368 (2018).

13 12 U.S.C. 1828(aa).

II. Description of the Interim Final Rule

This interim final rule amends the agencies' LCR rule to implement section 403 of the EGRRCPA. Section 403 requires the agencies to treat a municipal obligation as a level 2B liquid asset if the obligation, as of the calculation date, is liquid and readily-marketable and investment grade.14 To effect this change, the interim final rule makes certain amendments to each agency's LCR rule that incorporate the provisions of section 403 of the EGRRCPA.

The interim final rule adds a definition to the agencies' rule for the term “municipal obligations,” which, consistent with the EGRRCPA, means an obligation of (1) a state or any political subdivision thereof or (2) any agency or instrumentality of a state or any political subdivision thereof.

The interim final rule amends the HQLA criteria with respect to level 2B liquid assets by adding municipal obligations that, as of the calculation date, are both (1) liquid and readily-marketable and (2) investment grade (under 12 CFR part 1) to the list of assets that are eligible for treatment as level 2B liquid assets.15 The OCC's definition of “investment grade” under 12 CFR 1.2 provides that “[i]nvestment grade means the issuer of a security has an adequate capacity to meet financial commitments under the security for the projected life of the asset or exposure. An issuer has an adequate capacity to meet financial commitments if the risk of default by the obligor is low and the full and timely repayment of principal and interest is expected.” 16 A municipal obligation is required to meet this definition of “investment grade” as of the calculation date to be treated as a level 2B liquid asset under the interim final rule.

15 12 CFR 50.20 (OCC), 12 CFR 249.20 (FRB), and 12 CFR 329.20 (FDIC).

16 12 CFR 1.2.

Consistent with section 403, the interim final rule also amends the definition of “liquid and readily-marketable” in the FDIC's and OCC's rules so that the term has the same meaning given to it under the Board's rules. Under this provision of the Board's rules, a “liquid and readily-marketable” security is a security that is traded in an active secondary market with: (1) More than two committed market makers; (2) a large number of non-market maker participants on both the buying and selling sides of transactions; (3) timely and observable market prices; and (4) a high trading volume.17 As described above, a municipal obligation is required to be liquid and readily-marketable as of the date of calculation to be treated as a level 2B liquid asset under the interim final rule.

17 12 CFR 249.3.

As part of the interim final rule, the Board is rescinding the 2016 Amendments so that municipal obligations under the Board's LCR rule will be treated consistently with section 403 of the EGRRCPA. As a result of the above changes, covered companies will be able to count municipal obligations as HQLA that qualify as level 2B liquid assets, provided the municipal obligations meet the HQLA criteria under the LCR rule.18 Accordingly, covered companies will have greater flexibility in meeting the minimum requirements under the LCR rule as more types of assets will be eligible as HQLA. For FDIC- and OCC-regulated institutions, these changes will mark the first time that such institutions may treat any municipal obligations as HQLA. For Board-regulated institutions, these changes are expected to broaden the number of municipal obligations that can be counted as HQLA. In particular, for purposes of the types of assets eligible for treatment as HQLA, municipal obligations will no longer be required to be general obligation securities.19 As a result, many issuances of revenue bonds will now qualify as municipal obligations.

18 Corresponding changes will be made to the Complex Institution Liquidity Monitoring Report (FR 2052a). These changes will be described in a separate Federal Register notice.

19 Additionally, to count as HQLA, municipal obligations will not (1) be required to be issued or guaranteed by a public sector entity whose obligations have a proven record as a reliable source of liquidity in repurchase or sales markets during stressed market conditions, as demonstrated by the quantitative metrics included in the 2016 Amendments; or (2) be prohibited from being an obligation of a financial sector entity or a financial sector entity's consolidated subsidiary. In addition, the amount of municipal obligations that can be included in Board-regulated institutions' HQLA amount will no longer be limited to 5 percent of the total HQLA amount. The limit on the amount of municipal obligations of a single issuer that may be included as eligible HQLA will also no longer apply to Board-regulated institutions.

Only municipal obligations that meet the LCR rule's definition for liquid and readily-marketable and that are investment grade under 12 CFR part 1 will qualify for treatment as HQLA under this interim final rule.20 The interim final rule does not otherwise affect covered companies' obligations under the LCR rule.

20 This interim final rule does not affect other requirements under the LCR rule that serve to restrict HQLA, such as the 50 percent haircut for level 2B liquid assets under section 21(b) and the restriction that level 2B assets cannot exceed more than 15 percent of the total HQLA amount. In addition, this interim final rule does not affect the section 22 requirements, which address the operational and generally applicable criteria for eligible HQLA. With regard to net cash outflows, the interim final rule does not affect the requirements under sections 32 and 33, which address the calculation of outflow and inflow amounts, respectively.

III. Request for Comment

The definition of “municipal obligation” and the criteria for treating municipal obligations as level 2B liquid assets were established by section 403 of the EGRRCPA. Consistent with section 403, in what ways, if any, could the agencies clarify aspects of these provisions (e.g., by clarifying the terms “state” or “political subdivision”)? The agencies invite comment on this question and all other aspects of this interim final rule.

The agencies are issuing the interim final rule without prior notice and the opportunity for public comment and the 30 day delayed effective date ordinarily prescribed by the Administrative Procedure Act (APA).21 Pursuant to section 553(b)(B) of the APA, general notice and the opportunity for public comment are not required prior to the issuance of a final rule if an agency, for good cause, finds (and incorporates the finding and a brief statement of reasons therefor in the rules issued) that “notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.” 22

21 5 U.S.C. 553.

22 5 U.S.C. 553(b)(B).

As discussed above, this interim final rule implements the provisions of section 403 of the EGRRCPA, which became effective on May 24, 2018, and directs the agencies to make certain changes to the criteria for HQLA. The interim final rule adopts without change the statutory definition for “municipal obligations” and the requirement that municipal obligations be treated as level 2B liquid assets if the obligations are liquid and readily-marketable and investment grade. Because these changes to the LCR rule are mandated by the EGRRCPA, the agencies have determined that publishing a notice of proposed rulemaking is unnecessary. In addition, the agencies believe that the public interest is best served by implementing Congress's legislative directive as soon as possible because immediate implementation would provide clarity to the public regarding the liquidity rules and would be consistent with Congress's directive to the agencies under section 403(b) of the EGRRCPA to amend the LCR rule within 90 days after enactment of the EGRRCPA.

The effective date of this interim final rule is August 31, 2018. Pursuant to section 553(d)(3) of the APA, the required publication or service of a substantive rule shall be made not less than 30 days before its effective date, except as otherwise provided by the agency for good cause found and published with the rule.23 For the reasons described above in connection with APA section 553(b)(B), the agencies find good cause to publish the rule with an immediate effective date.

23 5 U.S.C. 553(d).

B. Riegle Community Development and Regulatory Improvement Act

Pursuant to section 302(a) of the Riegle Community Development and Regulatory Improvement Act (RCDRIA),24 in determining the effective date and administrative compliance requirements for a new regulation that imposes additional reporting, disclosure, or other requirements on insured depository institutions, each federal banking agency must consider any administrative burdens that such regulation would place on depository institutions and the benefits of such regulation. In addition, section 302(b) of the RCDRIA 25 requires such new regulation to take effect on the first day of a calendar quarter that begins on or after the date on which the regulations are published in final form, with certain exceptions, including for good cause. For the reasons described above in connection with the APA section 553(b)(B) requirement, the agencies find good cause exists under section 302 of RCDRIA to publish this interim final rule with an immediate effective date.

24 12 U.S.C. 4802(a).

25 12 U.S.C. 4802(b).

While the agencies believe there is good cause to issue the rules without advance notice and comment and with an immediate effective date, the agencies are interested in the views of the public and request comment on all aspects of the interim final rule.

C. Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) does not apply to a rulemaking when a general notice of proposed rulemaking is not required. 5 U.S.C. 603 and 604. As noted previously, the agencies have determined that it is unnecessary to publish a general notice of proposed rulemaking for this interim final rule. Accordingly, the RFA's requirements relating to an initial and final regulatory flexibility analysis do not apply. Nonetheless, the agencies observe that in light of the way the interim final rule operates, they believe that, with respect to the entities subject to the interim final rule and within each agency's respective jurisdiction, the interim final rule would not have a significant economic impact on a substantial number of small entities.26

26 Under regulations issued by the Small Business Administration, a small entity includes a depository institution, bank holding company, or savings and loan holding company with total assets of $550 million or less and trust companies with total assets of $38.5 million or less.

D. Paperwork Reduction Act of 1995

The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) states that no agency may conduct or sponsor, nor is the respondent required to respond to, an information collection unless it displays a currently valid Office of Management and Budget control number. The agencies have determined that this interim final rule does not create any new, or revise any existing, collections of information pursuant to the Paperwork Reduction Act.

E. Unfunded Mandates Reform Act of 1995

Section 202 of the Unfunded Mandates Reform Act of 1995 (Unfunded Mandates Act), 2 U.S.C. 1532, requires the OCC to prepare a budgetary impact statement before promulgating any final rule for which a general notice of proposed rulemaking was published. As discussed above, the OCC has determined that the publication of a general notice of proposed rulemaking is unnecessary. Accordingly, this interim final rule is not subject to section 202 of the Unfunded Mandates Act.

For the reasons stated in the preamble, the OCC amends 12 CFR part 50, the Board amends 12 CFR part 249, and the FDIC amends 12 CFR part 329 as follows:

Department of the TreasuryOffice of the Comptroller of the CurrencyPART 50—LIQUIDITY RISK MEASUREMENT STANDARDS1. The authority citation for part 50 is revised to read as follows:Authority:

12 U.S.C. 1 et seq., 93a, 481, 1818, 1828, and 1462 et seq.

2. Section 50.3 is amended by revising the definition for “Liquid and readily-marketable” and adding the definition for “Municipal obligation” in alphabetical order to read as follows:§ 50.3 Definitions.

Liquid and readily-marketable has the meaning given the term in 12 CFR 249.3.

Municipal obligation means an obligation of:

(1) A state or any political subdivision thereof; or

(2) Any agency or instrumentality of a state or any political subdivision thereof.

3. Section 50.20 is amended by:a. Republishing paragraph (c) introductory text;b. Removing the “or” at the end of paragraph (c)(1)(iii);c. Removing the period at the end of paragraph (c)(2)(vi) and adding “; or” in its place; andd. Adding paragraph (c)(3).

The republication and addition read as follows:

§ 50.20 High-quality liquid asset criteria.

(c) Level 2B liquid assets. An asset is a level 2B liquid asset if the asset is liquid and readily-marketable and is one of the following types of assets:

(3) A municipal obligation that is investment grade under 12 CFR part 1 as of the calculation date.

5. Amend § 249.3 by removing the definition for “General obligation” and adding the definition for “Municipal obligation” in alphabetical order to read as follows:§ 249.3 Definitions.

Municipal obligation means an obligation of:

(1) A state or any political subdivision thereof; or

(2) Any agency or instrumentality of a state or any political subdivision thereof.

6. Amend § 249.20 by republishing paragraph (c) introductory text, removing the “or” at the end of paragraph (c)(1)(iii), removing paragraph (c)(2), redesignating paragraph (c)(3) as (c)(2), removing the period at the end of newly redesignated paragraph (c)(2)(vi) and adding “; or” in its place, and adding a new paragraph (c)(3) to read as follows:§ 249.20 High-quality liquid asset criteria.

(c) Level 2B liquid assets. An asset is a level 2B liquid asset if the asset is liquid and readily-marketable and is one of the following types of assets:

(3) A municipal obligation that is investment grade under 12 CFR part 1 as of the calculation date.

§ 249.21 [Amended]7. Amend § 249.21 by:a. Removing paragraph (b)(4);b. Removing “; plus” at the end of paragraph (c)(2) and adding in its place a period;c. Removing paragraphs (c)(3), (f), and (g)(4);d. Removing “; plus” at the end of paragraph (h)(2) and adding in its place a period;e. Removing paragraphs (h)(3) and (k); andf. Redesignating paragraphs (g) through (j) as paragraphs (f) through (i), respectively.§ 249.22 [Amended]8. Amend § 249.22 by removing paragraph (c) and redesignating paragraph (d) as paragraph (c).Federal Deposit Insurance CorporationPART 329—LIQUIDITY RISK MEASUREMENT STANDARDS9. The authority citation for part 329 continues to read as follows:Authority:

12 U.S.C. 1815, 1816, 1818, 1819, 1828, 1831p-1, 5412.

10. Section 329.3 is amended by revising the definition for “Liquid and readily-marketable” and adding the definition for “Municipal obligation” in alphabetical order to read as follows:§ 329.3 Definitions.

Liquid and readily-marketable has the meaning given the term in 12 CFR 249.3.

Municipal obligation means an obligation of:

(1) A state or any political subdivision thereof; or

(2) Any agency or instrumentality of a state or any political subdivision thereof.

11. Section 329.20 is amended by:a. Republishing paragraph (c) introductory text;b. Removing the “or” at the end of paragraph (c)(1)(iii);c. Removing the period at the end of paragraph (c)(2)(vi) and adding “; or” in its place; andd. Adding paragraph (c)(3).

The republication and addition read as follows:

§ 329.20 High-quality liquid asset criteria.

(c) Level 2B liquid assets. An asset is a level 2B liquid asset if the asset is liquid and readily-marketable and is one of the following types of assets:

(3) A municipal obligation that is investment grade under 12 CFR part 1 as of the calculation date.

Dated: August 20, 2018.Joseph M. Otting,Comptroller of the Currency.By order of the Board of Governors of the Federal Reserve System, August 21, 2018.Ann E. Misback,Secretary of the Board.Dated at Washington, DC, on August 22, 2018.

These special conditions are issued for Ultramagic S.A. Models M-56, M-56C, M-65, M-65C, M-77, M-77C, M-90, M-105, M-120, M-130, M-145, M-160, N-180, N-210, N-250, N-300, N-355, N-425, S-70, S-90, S-105, S-130, S-160, T-150, T-180, T-210, V-56, V-65, V-77, V-90, and V-105 balloons. These balloons will have novel or unusual design features associated with a standard construction basket with a singular distribution that includes four occupant seats and a lower sidewall. The applicable airworthiness regulations do not contain adequate or appropriate safety standards for these design features. These special conditions contain the additional safety standards the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.

On August 4, 2016, Ultramagic S.A. (Ultramagic) applied for a change to Type Certificate (TC) No. B02CE 1 to include new basket Model no. CV-08 for balloon Models M-56, M-56C, M-65, M-65C, M-77, M-77C, M-90, M-105, M-120, M-130, M-145, M-160, N-180, N-210, N-250, N-300, N-355, N-425, S-70, S-90, S-105, S-130, S-160, T-150, T-180, T-210, V-56, V-65, V-77, V-90, and V-105. The CV-08 basket consists of a traditionally constructed basket, but incorporates seats with restraints and trays for all passengers, as well as a lower basket sidewall to offer a panoramic view for passengers. The CV-08 basket will be matched with one of the balloon envelopes associated with the balloon models listed in these special conditions. The volume of hot air, gores, maximum diameter, and total height defines the balloon envelope.

1See http://rgl.faa.gov/.

Most balloon baskets accommodate standing passengers. The CV-08 differs by incorporating passenger seats, restraints, and a lower basket sidewall. Due to the lower sidewall and seat configuration, passengers would need to remain seated and restrained with safety belts during flight. This configuration should consider the static strength of the installations, the possible loads in an accident, and the effect on passenger safety. Accident impact should consider safety comparison between a restrained, sitting occupant; and a normal, standing occupant. Safety requirements for balloon-seated occupants are not included in the existing airworthiness regulations. These special conditions evaluate the seat installations and restraints using methods consistent with special conditions issued by the European Aviation Safety Agency (EASA). The EASA special conditions are based upon a German standard for seats in hot air airships.

Type Certification Basis

Under the provisions of § 21.101, Ultramagic must show that the M-56, M-56C, M-65, M-65C, M-77, M-77C, M-90, M-105, M-120, M-130, M-145, M-160, N-180, N-210, N-250, N-300, N-355, N-425, S-70, S-90, S-105, S-130, S-160, T-150, T-180, T-210, V-56, V-65, V-77, V-90, and V-105 balloon models—coupled with the CV-08 basket—continues to meet the applicable provisions of the regulations incorporated by reference in TC No. B02CE or the applicable regulations in effect on the date of application for the change. The regulations incorporated by reference in the type certificate are commonly referred to as the “original type certification basis.” The regulations incorporated by reference in TC No. B02CE are as follows:

14 CFR 21.29 and part 31, effective on January, 1990, as amended by 31-1 through 31-5 inclusive.

If the Administrator finds that the applicable airworthiness regulations (i.e., 14 CFR part 31) do not contain adequate or appropriate safety standards for the balloon models listed in these special conditions because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

Special conditions are initially applicable to the model(s) for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same or similar novel or unusual design feature, or should any other model already included on the same type certificate be modified to incorporate the same or similar novel or unusual design feature, the FAA would apply these special conditions to the other model under § 21.101.

The FAA issues special conditions, as defined in 14 CFR 11.19, in accordance with § 11.38, and they become part of the type-certification basis under § 21.101.

EASA previously published a proposed special condition 2 (now expired) for seats and seat belts for hot air balloon baskets. EASA based the requirements of its proposed special condition on the German airworthiness requirements for Hot Air Airships LFHLLS,3 incorporating hot air balloon basket requirements for seats, seat belts, and the loads in an emergency landing condition, similar to hot air airship requirements. Ultramagic's change application applied the language in the EASA proposed special condition for CS 31HA.14(c), “Occupant mass,” CS 31HA.43(d), “Fitting factor,” CS 31HA.561(a) and (b)(1), “Emergency landing conditions—General,” and CS 31HA.785(a), (c), and (d), “Seats and seat belts” to the CV-08 basket. The FAA finds that these standards are appropriate for a seated, restrained occupant.

As discussed above, these special conditions are applicable to the Model M-56, M-56C, M-65, M-65C, M-77, M-77C, M-90, M-105, M-120, M-130, M-145, M-160, N-180, N-210, N-250, N-300, N-355, N-425, S-70, S-90, S-105, S-130, S-160, T-150, T-180, T-210, V-56, V-65, V-77, V-90, and V-105 balloons. Should Ultramagic apply at a later date for a change to the type certificate to include another model incorporating the same novel or unusual design feature, the FAA would apply these special conditions to that model as well.

Conclusion

This action affects only certain novel or unusual design features on the balloon models specified in these special conditions. It is not a rule of general applicability and it affects only the applicant who applied to the FAA for approval of these features on the airplane. These special conditions are identical in intent to the EASA special conditions, although the formatting has been altered to meet these special condition requirements.

For calculation purposes, it should be assumed the mass of an occupant is at least 86 kilograms (190 pounds).

b. Seats, Safety Belts, and Harnesses Factor of Safety

For each seat, safety belt, and harness, its attachment to the structure must be shown, by analysis, tests, or both, to be able to withstand the inertia forces prescribed in paragraph (c) of these special conditions multiplied by a fitting factor of 1.33.

c. Emergency Landing Conditions—General

The balloon—although it may be damaged under emergency landing conditions—must be designed to give each occupant every reasonable chance of avoiding serious injury in a crash landing—when seat belts provided for in the design are properly used—and the occupant is subject to the following ultimate inertia forces acting relative to the surrounding structure as well as independently of each other.

(1) Forward 6g(2) Sideways 6g(3) Downward 6gd. Seats and Seatbelts

(1) Each seat and its supporting structure must be designed for an occupant mass in accordance paragraph (a) of these special conditions and for the maximum load factors corresponding to the specified flight and ground load conditions, including the emergency landing conditions prescribed in paragraph (c) of these special conditions.

(2) Each seat or berth shall be fitted with an individual approved seat belt or harness.

(3) Seat belts installed on the balloon must not fail under flight or ground load conditions or emergency landing conditions in accordance with paragraph (c) of these special conditions, taking into account the geometrical arrangement of the belt attachment and the seat.

We are superseding Airworthiness Directive (AD) 2015-02-17, which applied to all Airbus Model A330-200, A330-200 Freighter, and A330-300 series airplanes. AD 2015-02-17 required revising the electrical emergency configuration procedure in the Emergency Procedures section of the airplane flight manual (AFM) to include procedures for deploying the ram air turbine manually to provide sufficient hydraulic power and avoid constant speed motor/generator (CSM/G) shedding. Since we issued AD 2015-02-17, we have determined that replacement or modification of the two flight warning computers (FWCs) is necessary to address the identified unsafe condition. This AD requires the replacement or modifications of the two FWCs. This AD also removes airplanes from the applicability. We are issuing this AD to address the unsafe condition on these products.

DATES:

This AD is effective October 5, 2018.

The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of October 5, 2018.

The Director of the Federal Register approved the incorporation by reference of certain other publications listed in this AD as of February 13, 2015 (80 FR 4762, January 29, 2015).

ADDRESSES:

For service information identified in this final rule, contact Airbus SAS, Airworthiness Office—EAW, Rond-Point Emile Dewoitine No: 2, 31700 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 44 51; email account.airworth-eas@airbus.com; internet http://www.airbus.com. You may view this referenced service information at the FAA, Transport Standards Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195. It is also available on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0169.

Examining the AD Docket

You may examine the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0169; or in person at Docket Operations between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this final rule, the regulatory evaluation, any comments received, and other information. The address for Docket Operations (phone: 800-647-5527) is Docket Operations, U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590.

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2015-02-17, Amendment 39-18084 (80 FR 4762, January 29, 2015) (“AD 2015-02-17”). AD 2015-02-17 applied to all Airbus Model A330-200, A330-200 Freighter, and A330-300 series airplanes. The NPRM published in the Federal Register on April 16, 2018 (83 FR 16248). The NPRM was prompted by a determination that replacement or modification of the two FWCs is necessary to address the identified unsafe condition. The NPRM proposed to require the replacement or modification of the two FWCs. The NPRM also proposed to remove airplanes from the applicability. We are issuing this AD to address the identified unsafe condition.

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2017-0105R1, dated July 17, 2017 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Airbus SAS Model A330-200, A330-200 Freighter, and A330-300 series airplanes. The MCAI states:

The Constant Speed Motor/Generator (CSM/G), as installed on Airbus A330 aeroplanes, is qualified for an overload condition of 9.5 kVA [kilovolt-ampere] for 30 minutes. This duration is sufficient to perform safe landing and go-around. However, electrical load analysis revealed that the hydraulic power might not be sufficient to supply the CSM/G during slat/flap extension, when only one engine is running.

This condition, if not corrected, and in conjunction with the loss of main system, could lead to a scenario where the crew is not clearly warned that the electrical system has switched on the battery and thus has a limited duration to support a safe landing.

Since EASA AD 2014-0281 was issued, in order to improve the “ELEC EMER CONFIG” procedure, Airbus developed modifications to install improved FWCs, which is embodied in production through Airbus modification (mod) 205228, and to be embodied in service with Airbus SB A330-31-3232 * * *.

For the reasons described above, this [EASA] AD retains the requirements of EASA AD 2014-0281, which is superseded, and requires installation of a software standard upgrade [or replacement] of the two FWCs and removal of the applicable AFM TR once the aeroplane is modified.

Since EASA AD 2017-0105 was issued, it was identified that there was no need to require removal of applicable AFM TR, nor incorporation of a later AFM revision, as the contents are identical. This revised [EASA] AD deletes the requirement of paragraph (3) [of EASA AD 2017-0105].

You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0169.

Comments

We gave the public the opportunity to participate in developing this final rule. The following presents the comments received on the NPRM and the FAA's response to each comment. The Air Line Pilots Association, International (ALPA), indicated its support for the NPRM.

Request for Additional Credit

Delta Air Lines requested that paragraph (l) of the proposed AD, “Credit for Previous Actions,” include Airbus Service Bulletin A330-31-3232, Revision 01, dated February 14, 2017, as well as Airbus Service Bulletin A330-31-3232, dated May 4, 2016.

We disagree this change is necessary. Paragraph (f) of this AD requires compliance with this AD unless already done. Paragraph (j) of this AD mandates actions in accordance with Airbus Service Bulletin A330-31-3232, Revision 01, dated February 14, 2017. Therefore, as specified in paragraph (f) of this AD, having previously accomplished the actions specified in Airbus Service Bulletin A330-31-3232, Revision 01, dated February 14, 2017, means compliance with paragraph (j) of this AD has already been established. In paragraph (l) of this AD, we give credit to operators that have previously accomplished an earlier revision of the required service information identified in paragraph (j) of this AD; therefore, as specified in paragraph (l) of this AD, having accomplished Airbus Service Bulletin A330-31-3232, dated May 4, 2016, prior to the effective date of this AD means compliance with paragraph (j) of this AD has already been established. We have not changed this AD in this regard.

Conclusion

We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this final rule as proposed, except for minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM for addressing the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM.

Airbus SAS has issued Service Bulletin A330-31-3232, Revision 01, including Appendix 01, dated February 14, 2017. This service information describes procedures for replacement or modification of the FWCs.

This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

Costs of Compliance

We estimate that this AD affects 105 airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

Estimated CostsLabor costParts costCost per

product

Cost on U.S.

operators

4 work-hour × $85 per hour = $340$0$340$35,700

According to the manufacturer, some of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all costs in our cost estimate.

Authority for This Rulemaking

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

This AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to transport category airplanes and associated appliances to the Director of the System Oversight Division.

Regulatory Findings

We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that this AD:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);

3. Will not affect intrastate aviation in Alaska; and

4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

This AD applies to the airplanes identified in paragraphs (c)(1), (c)(2), and (c)(3) of this AD, certificated in any category, all manufacturer serial numbers, except those airplanes with Airbus modification 205228 embodied in production.

This AD was prompted by an electrical load analysis that revealed that hydraulic power might not be sufficient to supply the constant speed motor/generator (CSM/G) during slat/flap extension when only one engine is running and a determination that replacement or modification of the two flight warning computers (FWCs) is necessary to address the identified unsafe condition. We are issuing this AD to prevent such a condition which, in conjunction with the loss of the main electrical system, could lead to the scenario where the flight crew is not clearly warned that the electrical system has switched on the battery and thus has a limited duration that would allow a safe landing.

(f) Compliance

Comply with this AD within the compliance times specified, unless already done.

This paragraph restates the requirements of paragraph (g) of AD 2015-02-17, with a new exception. Except for airplanes identified in paragraph (h) of this AD: Within 15 days after February 13, 2015 (the effective date of AD 2015-02-17), revise the Emergency Procedures section of the Airbus A330/A340 AFM to include the information in the applicable Airbus temporary revision (TR) specified in paragraph (g)(1) or (g)(2) of this AD. This may be done by inserting a copy of the applicable TR specified in paragraph (g)(1) or (g)(2) of this AD into the AFM. Operate the airplane according to the procedures in the applicable TR. When the information in the applicable TR has been included in the general revisions of the AFM, the general revisions may be inserted into the AFM, provided the relevant information in the general revision is identical to that in the TR, and the TR may be removed.

Airplanes operated with an AFM that incorporates the information in Airbus EMERGENCY PROCEDURES/24-ELECTRICAL POWER/ELEC—EMER CONFIG Documentary Unit (DU) 00005218.0001001 (for airplanes in Airbus pre-modification 47930 configuration and pre-Airbus Service Bulletin A330-28-3067 configuration), or DU 00005218.0002001 (for airplanes in an Airbus post-modification 47930 configuration or post-Airbus Service Bulletin A330-28-3067 configuration), as applicable, are compliant with the requirements of paragraph (g) of this AD, provided that the applicable DU is not removed from the AFM.

(i) New Definitions

(1) For the purposes of this AD, an affected FWC is an FWC standard lower than T7-0. An FWC that is not affected is an FWC standard T7-0 having part number (P/N) LA2E20202T70000, or higher standard.

(2) For the purposes of this AD: Group 1 airplanes are those equipped with an affected FWC (as defined in paragraph (i)(1) of this AD) as of the effective date of this AD. Group 2 airplanes are those equipped with FWCs that are not affected (as defined in paragraph (i)(1) of this AD) as of the effective date of this AD.

(j) New Requirement of This AD: FWC Replacement or Modification

For Group 1 airplanes: Within 24 months after the effective date of this AD: Replace or modify an affected FWC with an FWC that is not affected, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A330-31-3232, Revision 01, including Appendix 01, dated February 14, 2017.

(k) Parts Installation Prohibition

(1) For Group 1 airplanes: After accomplishing the actions required by paragraph (j) of this AD, no person may install an affected FWC on the modified airplane.

(2) For Group 2 airplanes: As of the effective date of this AD, no person may install an affected FWC on any airplane.

(l) Credit for Previous Actions

This paragraph provides credit for actions required by paragraph (j) of this AD, if those actions were performed before the effective date of this AD using Airbus Service Bulletin A330-31-3232, dated May 4, 2016.

(m) Other FAA AD Provisions

(1) Alternative Methods of Compliance (AMOCs): The Manager, International Section, Transport Standards Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the International Section, send it to the attention of the person identified in paragraph (n)(2) of this AD. Information may be emailed to: 9-ANM-116-AMOC-REQUESTS@faa.gov.

(i) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.

(ii) AMOCs approved previously for AD 2015-02-17 are approved as AMOCs for the corresponding provisions of this AD.

(2) Contacting the Manufacturer: As of the effective date of this AD, for any requirement in this AD to obtain corrective actions from a manufacturer, the action must be accomplished using a method approved by the Manager, International Section, Transport Standards Branch, FAA; or the European Aviation Safety Agency (EASA); or Airbus SAS's EASA Design Organization Approval (DOA). If approved by the DOA, the approval must include the DOA-authorized signature.

(3) Required for Compliance (RC): If any service information contains procedures or tests that are identified as RC, those procedures and tests must be done to comply with this AD; any procedures or tests that are not identified as RC are recommended. Those procedures and tests that are not identified as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an AMOC, provided the procedures and tests identified as RC can be done and the airplane can be put back in an airworthy condition. Any substitutions or changes to procedures or tests identified as RC require approval of an AMOC.

(n) Related Information

(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA AD 2017-0105R1, dated July 17, 2017, for related information. This MCAI may be found in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0169.

(6) You may view this service information at the FAA, Transport Standards Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195.

(7) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: http://www.archives.gov/federal-register/cfr/ibr-locations.html.

We are adopting a new airworthiness directive (AD) for certain Airbus SAS Model A318, A319, and A320 series airplanes, and Model A321-111, -112, -131, -211, -212, -213, -231, -232, -251N, -253N, and -271N airplanes. This AD was prompted by a determination that more restrictive maintenance requirements and airworthiness limitations are necessary. This AD requires revising the maintenance or inspection program, as applicable, to incorporate the specified maintenance requirements and airworthiness limitations. We are issuing this AD to address the unsafe condition on these products.

DATES:

This AD is effective October 5, 2018.

The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of October 5, 2018.

ADDRESSES:

For service information identified in this final rule, contact Airbus SAS, Airworthiness Office—EIAS, Rond-Point Emile Dewoitine No: 2, 31700 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 44 51; email account.airworth-eas@airbus.com; internet http://www.airbus.com. You may view this service information at the FAA, Transport Standards Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195. It is also available on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0361.

Examining the AD Docket

You may examine the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0361; or in person at Docket Operations between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this final rule, the regulatory evaluation, any comments received, and other information. The address for Docket Operations (phone: 800-647-5527) is Docket Operations, U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590.

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Airbus SAS Model A318, A319, and A320 series airplanes, and Model A321-111, -112, -131, -211, -212, -213, -231, -232, -251N, -253N, and -271N airplanes. The NPRM published in the Federal Register on May 3, 2018 (83 FR 19466). The NPRM was prompted by a determination that more restrictive maintenance requirements and airworthiness limitations are necessary. The NPRM proposed to require revising the maintenance or inspection program, as applicable, to incorporate the specified maintenance requirements and airworthiness limitations.

We are issuing this AD to address the failure of certain life-limited parts, which could result in reduced structural integrity of the airplane.

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2017-0215, dated October 24, 2017 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Airbus SAS Model A318, A319, and A320 series airplanes, and Model A321-111, -112, -131, -211, -212, -213, -231, -232, -251N, -253N, and -271N airplanes. The MCAI states:

The airworthiness limitations for Airbus A320 family aeroplanes, which are approved by EASA, are currently defined and published in the A318, A319, A320 and A321 Airworthiness Limitations Section (ALS) document(s). The Safe Life Airworthiness Limitation Items are specified in ALS Part 1. These instructions have been identified as mandatory for continued airworthiness.

Failure to accomplish these instructions could result in an unsafe condition.

Since those ADs were issued, studies were conducted in the frame of in-service events or during life extension campaigns, the results of which prompted revision of the life limits of several components installed on A320 family aeroplanes. Consequently, Airbus successively issued Revision 03, Revision 04 and Revision 05 of the A318/A319/A320/A321 ALS Part 1. ALS Part 1 Revision 05 also includes the life limits required by EASA AD 2014-0141. A318/A319/A321 ALS Part 1 Revision 05 issue 02 was issued to provide clarifications.

For the reason described above, this [EASA] AD retains the requirements of EASA AD 2012-0008 and EASA AD 2014-0141, which are superseded, and requires accomplishment of the actions specified in A318/A319/A320/A321 ALS Part 1 Revision 05.

You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0361.

Comments

We gave the public the opportunity to participate in developing this final rule. We received no comments on the NPRM or on the determination of the cost to the public.

Conclusion

We reviewed the relevant data and determined that air safety and the public interest require adopting this final rule as proposed except for minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM for addressing the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM.

Related Service Information Under 1 CFR Part 51

Airbus SAS has issued Airbus A318/A319/A320/A321 Airworthiness Limitations Section (ALS) Part 1 Safe Life Airworthiness Limitations (SL-ALI), Revision 05, Issue 02, dated April 19, 2017. This service information describes new maintenance requirements and airworthiness limitations. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

Costs of Compliance

We estimate that this AD affects 1,250 airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

We have determined that revising the maintenance or inspection program takes an average of 90 work-hours per operator, although we recognize that this number may vary from operator to operator. In the past, we have estimated that this action takes 1 work-hour per airplane. Since operators incorporate maintenance or inspection program changes for their affected fleet(s), we have determined that a per-operator estimate is more accurate than a per-airplane estimate. Therefore, we estimate the total cost per operator to be $7,650 (90 work-hours × $85 per work-hour).

Authority for This Rulemaking

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

This AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to transport category airplanes and associated appliances to the Director of the System Oversight Division.

Regulatory Findings

This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866,

(2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

(3) Will not affect intrastate aviation in Alaska, and

(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

This AD applies to the Airbus SAS airplanes identified in paragraphs (c)(1) through (c)(4) of this AD, certificated in any category, with an original certificate of airworthiness or original export certificate of airworthiness issued on or before April 19, 2017.

This AD was prompted by a determination that more restrictive maintenance requirements and airworthiness limitations are necessary. We are issuing this AD to address the failure of certain life-limited parts, which could result in reduced structural integrity of the airplane.

(f) Compliance

Comply with this AD within the compliance times specified, unless already done.

(g) Revision of Maintenance or Inspection Program

Within 90 days after the effective date of this AD, revise the maintenance or inspection program, as applicable, to incorporate Airbus A318/A319/A320/A321 Airworthiness Limitations Section (ALS) Part 1 Safe Life Airworthiness Limitations (SL-ALI), Revision 05, Issue 02, dated April 19, 2017. The initial compliance times for new or revised tasks are at the applicable times specified in Airbus A318/A319/A320/A321 ALS Part 1 Safe Life Airworthiness Limitations (SL-ALI), Revision 05, Issue 02, dated April 19, 2017, or within 90 days after the effective date of this AD, whichever occurs later.

(h) No Alternative Actions and Intervals

After the maintenance or inspection program has been revised as required by paragraph (g) of this AD, no alternative actions (e.g., inspections) or intervals may be used unless the actions and intervals are approved as an alternative method of compliance (AMOC) in accordance with the procedures specified in paragraph (j)(1) of this AD.

(i) Terminating Action for AD 2015-05-02 and AD 2015-22-08

Accomplishing the actions required by this AD terminates all requirements of AD 2015-05-02 and AD 2015-22-08.

(j) Other FAA AD Provisions

The following provisions also apply to this AD:

(1) Alternative Methods of Compliance (AMOCs): The Manager, International Section, Transport Standards Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the International Section, send it to the attention of the person identified in paragraph (k)(2) of this AD. Information may be emailed to: 9-ANM-116-AMOC-REQUESTS@faa.gov. Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.

(2) Contacting the Manufacturer: For any requirement in this AD to obtain corrective actions from a manufacturer, the action must be accomplished using a method approved by the Manager, International Section, Transport Standards Branch, FAA; or the European Aviation Safety Agency (EASA); or Airbus SAS's EASA Design Organization Approval (DOA). If approved by the DOA, the approval must include the DOA-authorized signature.

(k) Related Information

(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA AD 2017-0215, dated October 24, 2017, for related information. This MCAI may be found in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0361.

(4) You may view this service information at the FAA, Transport Standards Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195.

(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: http://www.archives.gov/federal-register/cfr/ibr-locations.html.

We are adopting a new airworthiness directive (AD) for certain ATR-GIE Avions de Transport Régional Model ATR42-200, -300, and -320 airplanes. This AD was prompted by a determination that more restrictive maintenance instructions and airworthiness limitations are necessary. This AD requires updating the maintenance or inspection program, as applicable, to incorporate new or more restrictive maintenance requirements and airworthiness limitations. We are issuing this AD to address the unsafe condition on these products.

DATES:

This AD is effective October 5, 2018.

The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of October 5, 2018.

ADDRESSES:

For service information identified in this final rule, contact ATR-GIE Avions de Transport Régional, 1 Allée Pierre Nadot, 31712 Blagnac Cedex, France; telephone +33 (0) 5 62 21 62 21; fax +33 (0) 5 62 21 67 18; email continued.airworthiness@atr-aircraft.com; http://www.atr-aircraft.com. You may view this service information at the FAA, Transport Standards Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195. It is also available on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0391.

Examining the AD Docket

You may examine the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0391; or in person at Docket Operations between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this final rule, the regulatory evaluation, any comments received, and other information. The address for Docket Operations (phone: 800-647-5527) is Docket Operations, U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590.

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain ATR-GIE Avions de Transport Régional Model ATR42-200, -300, and -320 airplanes. The NPRM published in the Federal Register on May 9, 2018 (83 FR 21191). The NPRM was prompted by a determination that more restrictive maintenance instructions and airworthiness limitations are necessary. The NPRM proposed to require updating the maintenance or inspection program, as applicable, to incorporate new or more restrictive maintenance requirements and airworthiness limitations.

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2017-0221R1, dated December 15, 2017 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all ATR-GIE Avions de Transport Régional Model ATR42-200, -300, and -320 airplanes. The MCAI states:

The airworthiness limitations and certification maintenance requirements (CMR) for ATR aeroplanes, which are approved by EASA, are currently defined and published in the ATR42-200/-300/-320 Time Limits (TL) document. These instructions have been identified as mandatory for continued airworthiness.

Failure to accomplish these instructions could result in an unsafe condition.

Consequently, ATR published Revision 8 of the ATR42-200/-300/-320 TL document, which contains new and/or more restrictive CMRs and airworthiness limitation tasks.

For the reasons described above, this [EASA] AD requires accomplishment of the actions specified in the ATR42-200/-300/-320 TL document Revision 8, hereafter referred to as `the TLD' in this [EASA] AD.

This [EASA] AD is revised to provide the correct issue date (17 October 2016) of the TLD. The original [EASA] AD inadvertently referenced the EASA approval date for that document.

You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0391.

Comments

We gave the public the opportunity to participate in developing this final rule. We received no comments on the NPRM or on the determination of the cost to the public.

Conclusion

We reviewed the relevant data and determined that air safety and the public interest require adopting this final rule as proposed, except for minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM for addressing the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM.

Related Service Information Under 1 CFR Part 51

ATR-GIE Avions de Transport Régional has issued ATR42-200/-300/-320, Time Limits Document (TL), Revision 8, dated October 17, 2016. This service information describes life limits and maintenance requirements for the affected airplanes. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

Costs of Compliance

We estimate that this AD affects 33 airplanes of U.S. registry.

We estimate the following costs to comply with this AD.

We have determined that revising the maintenance or inspection program takes an average of 90 work-hours per operator, although we recognize that this number may vary from operator to operator. In the past, we have estimated that this action takes 1 work-hour per airplane. Since operators incorporate maintenance or inspection program changes for their affected fleet(s), we have determined that a per-operator estimate is more accurate than a per-airplane estimate. Therefore, we estimate the total cost per operator to be $7,650 (90 work-hours × $85 per work-hour).

Authority for This Rulemaking

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

This AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to transport category airplanes and associated appliances to the Director of the System Oversight Division.

Regulatory Findings

This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866,

(2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

(3) Will not affect intrastate aviation in Alaska, and

(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

This AD applies to ATR-GIE Avions de Transport Régional Model ATR42-200, -300, and -320 airplanes, certificated in any category, with an original airworthiness certificate or original export certificate of airworthiness dated on or before October 17, 2016.

This AD was prompted by a determination that more restrictive maintenance instructions and airworthiness limitations are necessary. We are issuing this AD to prevent reduced structural integrity of the airplane.

(f) Compliance

Comply with this AD within the compliance times specified, unless already done.

(g) Maintenance or Inspection Program Revision

Within 90 days after the effective date of this AD, revise the maintenance or inspection program, as applicable, to incorporate the information specified in the Airworthiness Limitations (ALS) and Certification Maintenance Requirements (CMR) sections of ATR ATR42-200/-300/-320, Time Limits Document (TL), Revision 8, dated October 17, 2016. The initial compliance time for accomplishing the tasks is at the applicable times specified in the ALS and CMR sections of ATR ATR42-200/-300/-320, Time Limits Document (TL), Revision 8, dated October 17, 2016, or within 90 days after the effective date of this AD, whichever occurs later, except as specified in paragraph (h) of this AD.

(h) Initial Compliance Times for Certain CMR Tasks

For the CMR tasks listed in figure 1 to paragraph (h) of this AD, the initial compliance time for accomplishing the tasks is at the applicable time specified in the ALS and CMR sections of ATR ATR42-200/-300/-320, Time Limits Document (TL), Revision 8, dated October 17, 2016, or within the compliance time specified in figure 1 to paragraph (h) of this AD, whichever occurs later.

ER31AU18.000(i) No Alternative Actions and Intervals

After the maintenance or inspection program, as applicable, has been revised as required by paragraph (g) of this AD, no alternative actions (e.g., inspections) or intervals may be used unless the actions or intervals are approved as an alternative method of compliance (AMOC) in accordance with the procedures specified in paragraph (k)(1) of this AD.

(1) Alternative Methods of Compliance (AMOCs): The Manager, International Section, Transport Standards Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the International Section, send it to the attention of the person identified in paragraph (l)(2) of this AD. Information may be emailed to: 9-ANM-116-AMOC-REQUESTS@faa.gov. Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.

(2) Contacting the Manufacturer: For any requirement in this AD to obtain corrective actions from a manufacturer, the action must be accomplished using a method approved by the Manager, International Section, Transport Standards Branch, FAA; or the European Aviation Safety Agency (EASA); or ATR-GIE Avions de Transport Régional's EASA Design Organization Approval (DOA). If approved by the DOA, the approval must include the DOA-authorized signature.

(l) Related Information

(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA AD 2017-0221R1, dated December 15, 2017, for related information. This MCAI may be found in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0391.

(4) You may view this service information at the FAA, Transport Standards Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195.

(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: http://www.archives.gov/federal-register/cfr/ibr-locations.html.

The Securities and Exchange Commission (“Commission”) is revising regulations with respect to the delegations of authority to the Commission's General Counsel. The revisions are a result of the Commission's experience with its existing rules and increase the efficiency of the adjudicatory process.

The Commission is revising the delegations of authority to its General Counsel as a result of the Commission's experience with its existing rules and to increase the efficiency of the adjudicatory process. The changes make available to that process the resources of the Office of the General Counsel in timely disposing of procedural and other prehearing matters that are typically of a routine or non-controversial nature. Congress has authorized such delegation by Public Law 87-592, 76 Stat. 394, 15 U.S.C. 78d-1(a), which provides that the Commission “shall have the authority to delegate, by published rule or order, any of its functions to . . . an employee or employee board, including functions with respect to hearing, determining, ordering, certifying, reporting, or otherwise acting as to any work, business or matter.”

Accordingly, the Commission is amending its rules to delegate authority to the General Counsel to determine procedural requests and other non-dispositive, prehearing matters with respect to administrative proceedings conducted pursuant to the Securities Act of 1933, 15 U.S.C. 77a et seq., the Securities Exchange Act of 1934, 15 U.S.C. 78a et seq.; the Investment Company Act of 1940, 15 U.S.C. 80a-1 et seq.; the Investment Advisers Act of 1940, 15 U.S.C. 80b-1 et seq.; and the provisions of Rule 102(e) of the Commission's Rules of Practice, 17 CFR 201.102(e), that have been set for hearing before the Commission. Under this delegation, the General Counsel (or, under his or her direction, such persons as might be designated from time to time by the Chairman of the Commission) would perform functions such as fixing times and places for hearings after a proceeding has been authorized; adjusting or cancelling hearing dates; setting or modifying briefing schedules; staying the proceeding pending a related criminal proceeding or the Commission's consideration of an offer of settlement; reducing or extending the time within which to file papers; modifying length limitations; denying or granting leave to file motions and other papers; resolving applications for confidential treatment or to maintain materials under seal; making rulings regarding the manner or timing of service or of the Division of Enforcement's production of its investigative file; directing that the parties meet for a prehearing conference and scheduling or cancelling such a conference; issuing an order to show cause if a party fails to answer, respond to a dispositive motion, or otherwise defend the proceeding within the time provided; striking procedurally deficient filings; and other similarly routine matters that arise in administrative proceedings.

The Commission does not delegate to the General Counsel functions with respect to issuing subpoenas, authorizing depositions, ruling upon the admissibility of evidence or upon motions to quash or to compel, presiding over a hearing or the taking of testimony, sanctioning a party, acting upon a dispositive motion, declaring a default, disposing of a claim or defense, or otherwise resolving or terminating the proceeding on the merits. This rule also does not affect the delegation of functions with respect to administrative proceedings conducted before an administrative law judge or other hearing officer, proceedings in which an initial or recommended decision has been issued, or proceedings in which a final order of the Commission has been issued.

With respect to any proceeding in which the Chairman or the General Counsel has determined that separation of functions requirements or other circumstances would make inappropriate the General Counsel's exercise of such functions, those functions are delegated to the Secretary of the Commission. Notwithstanding this delegation, the General Counsel may submit any matter he or she believes appropriate to the Commission. Furthermore, any action made by the General Counsel pursuant to delegated authority would be subject to Commission review as provided by Rules 430 and 431 of the Commission's Rules of Practice, 17 CFR 201.430-201.431 and 15 U.S.C. 78d-1(b). Additionally, being of an inherently preliminary and interlocutory nature, any such action may be revisited by the Commission, on its own initiative or on request of a party, at any time before the Commission's issuance of a final order resolving the proceeding.

II. Administrative Law Matters

The Commission finds, in accordance with the Administrative Procedure Act (“APA”), 5 U.S.C. 553(b)(3)(A), that these revisions relate solely to agency organization, procedures, or practice and do not constitute a substantive rule. Accordingly, the APA's provisions regarding notice of rulemaking, opportunity for public comment, and advance publication of the amendments prior to their effective date are not applicable. These changes are therefore effective on August 31, 2018. For the same reason, and because these amendments do not affect the rights or obligations of non-agency parties, the provisions of the Small Business Regulatory Enforcement Fairness Act, 5 U.S.C. 804(3)(C), are not applicable. Additionally, the provisions of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., which apply only when notice and comment are required by the APA or other law, are not applicable. These amendments do not contain any collection of information requirements as defined by the Paperwork Reduction Act of 1995, and in any event, agency information collections during the conduct of administrative proceedings are exempt from that Act. See 44 U.S.C. 3518(c)(1)(B)(ii); 5 CFR 1320.4. Further, because the amendments impose no new burdens on private parties, the Commission does not believe that the amendments will have any impact on competition for purposes of Section 23(a)(2) of the Exchange Act.

III. Statutory Authority

This rule is adopted pursuant to statutory authority granted to the Commission, including Section 19 of the Securities Act, 15 U.S.C. 77s; Sections 4A, 4B, and 23 of the Exchange Act, 15 U.S.C. 78d-1, 78d-2, and 78w; Section 38 of the Investment Company Act, 15 U.S.C. 80a-37; Section 211 of the Investment Advisers Act, 15 U.S.C. 80b-11; and Section 3 of the Sarbanes-Oxley Act of 2002, 15 U.S.C. 7202.

For the reasons set out in the preamble, the Commission is amending Title 17, Chapter II of the Code of Federal Regulations as follows:

PART 200—ORGANIZATION; CONDUCT AND ETHICS; AND INFORMATION AND REQUESTSSubpart A—Organization and Program Management1. The authority citation for Part 200, Subpart A continues to read in part as follows:Authority:

2. Section 200.30-7 is amended by:a. Redesignating paragraph (d) as paragraph (e); andb. Adding new paragraph (d) to read as follows:§ 200.30-7 Delegation of authority to Secretary of the Commission.

(d) The functions otherwise delegated to the General Counsel under § 200.30-14(i), with respect to any proceeding in which the Chairman or the General Counsel has determined, pursuant to § 200.30-14(j), that separation of functions requirements or other circumstances would make inappropriate the General Counsel's exercise of such delegated functions.

(i)(1) With respect to a proceeding conducted pursuant to the Securities Act of 1933, 15 U.S.C. 77a et seq., the Securities Exchange Act of 1934, 15 U.S.C. 78a et seq.; the Investment Company Act of 1940, 15 U.S.C. 80a-1 et seq.; the Investment Advisers Act of 1940, 15 U.S.C. 80b-1 et seq.; and the provisions of Rule 102(e) of the Commission's Rules of Practice, 17 CFR 201.102(e), that has been set for hearing before the Commission pursuant to Rule 110 of the Commission's Rules of Practice, 17 CFR 201.110:

(i) To determine procedural requests or similar prehearing matters; and

(ii) To rule upon non-dispositive, prehearing motions.

(2) Provided, however, that the General Counsel may not issue subpoenas, authorize depositions, rule upon the admissibility of evidence or upon motions to quash or to compel, preside over a hearing or the taking of testimony, sanction a party, act upon a dispositive motion, declare a default, dispose of a claim or defense, or otherwise resolve or terminate the proceeding on the merits.

(j) Notwithstanding anything in paragraph (i) of this section, the functions described in paragraph (i) of this section are not delegated to the General Counsel with respect to proceedings in which the Chairman or the General Counsel determines that separation of functions requirements or other circumstances would make inappropriate the General Counsel's exercise of such delegated functions. With respect to such proceedings, such functions are delegated to the Secretary of the Commission pursuant to § 200.30-7.

(k) Notwithstanding anything in paragraphs (g) or (i) of this section, in any case described in paragraphs (g) or (i) of this section in which the General Counsel believes it appropriate, he or she may submit the matter to the Commission.

The Tennessee Valley Authority (TVA) is publishing a final rule to amend its regulations that govern floating cabins located on the Tennessee River and its tributaries. The mooring of floating cabins on the TVA reservoir system has increased, and TVA has determined that this poses an unacceptable risk to navigation, safety, and the environment. Left unaddressed, floating cabins convert the public waters under TVA's management to private use. The amendments re-define nonnavigable houseboats and floating cabins using one term—“floating cabins”—and prohibit new floating cabins on TVA-managed reservoirs after December 16, 2016. The amendments also include limited mooring standards, limitations on expansions of floating cabins, and requirements for owners to register their floating cabins. Additional health, safety, and environmental standards for floating cabins will be addressed in a later rulemaking once TVA has had the opportunity to discuss such standards with various stakeholders.

In addition, and separate from the updated rule amendments for floating cabins, these amendments contain minor changes to clarify when TVA will allow some water-use facilities (e.g., docks) to be as large as 1800 square feet.

This final rule is promulgated under the authority of the TVA Act, as amended, 16 U.S.C. 831-831ee, Title V of the Independent Offices Appropriations Act of 1955, 31 U.S.C. 9701, and OMB Circular No. A-25. Under Section 26a of the TVA Act, no obstructions affecting navigation, flood control, or public lands or reservations shall be constructed, operated, or maintained across, along, or in the Tennessee River System without TVA's approval. TVA has long considered nonnavigable structures such as floating cabins to be obstructions that require its approval. In addition, Section 9b of the TVA Act provides that TVA “may establish regulations to prevent the construction of new floating cabins.” 16 U.S.C. 831h-3(e).

Background and Proposed Amendments

TVA is a multi-purpose federal agency that has been charged by Congress with promoting the wise use and conservation of the resources of the Tennessee Valley region, including the Tennessee River System. In carrying out this mission, TVA operates a system of dams and reservoirs on the Tennessee River and its tributaries for the purpose of navigation, flood control, and power production. Consistent with those purposes, TVA uses the system to improve water quality and water supply and to provide a wide range of public benefits including recreation.

To promote the unified development and regulation of the Tennessee River System, Congress directed TVA to approve obstructions across, along, or in the river system under Section 26a of the TVA Act, as amended. “Obstruction” is a broad term that includes, by way of example, boat docks, piers, boathouses, buoys, floats, boat launching ramps, fills, water intakes, devices for discharging effluents, bridges, aerial cables, culverts, pipelines, fish attractors, shoreline stabilization projects, channel excavations, and nonnavigable houseboats. TVA also owns, as agent for the United States, much of the shoreline and inundated land along and under its reservoir system.

Since 1971, TVA has used its authority under Section 26a to prohibit the mooring on the Tennessee River System of new nonnavigable houseboats that are used primarily for habitation or occupation and not for navigation or water transportation. In particular, TVA amended its regulations in 1971 to prohibit the mooring or anchoring of new nonnavigable houseboats except for those in existence before November 21, 1971. Criteria were established then to identify when a houseboat was considered “navigable” and the conditions under which existing nonnavigable houseboats would be allowed to remain. These criteria were characteristics that TVA determined were indicative of real watercraft; i.e., boats or vessels that are designed and used primarily to traverse water. Since 1971, TVA has made minor changes to its regulations affecting nonnavigable houseboats, most notably in 1978 when TVA updated the prohibited mooring of nonnavigable houseboats on its reservoir system except for those in existence on or before February 15, 1978. The navigability criteria, however, largely have remained unchanged.

A “nonnavigable houseboat” under TVA's current regulations is identified as any houseboat not in compliance with the following criteria:

Built on a boat hull or on two or more pontoons;

Equipped with a motor and rudder controls located at a point on the houseboat from which there is forward visibility over a 180-degree range;

Compliant with all applicable state and federal requirements relating to vessels;

Registered as a vessel in the state of principal use; and

State registration numbers clearly displayed on the vessel.

Despite the nonnavigable houseboat prohibition, new nonnavigable houseboats in the form of floating cabins have been moored on TVA reservoirs. TVA estimates that approximately 2,000 floating cabins and older nonnavigable houseboats are now moored on TVA reservoirs. Some developers and owners of these floating cabins have asserted that they are not nonnavigable houseboats because they have been designed to meet the criteria for navigability in TVA's regulations. Whether or not this is true, these floating cabins are designed and used primarily for human habitation at a fixed location rather than for transportation or navigation. These floating cabins are a modern version of the pre-1978 nonnavigable houseboats that TVA addressed in its 1971 and 1978 regulatory actions. They are not in any real sense watercraft, and absent action by TVA, the mooring of floating cabins on TVA reservoirs will continue to increase. Until now, TVA has discouraged the increased mooring of floating cabins without using the full scope of its regulatory authority under the TVA Act.

In determining what action to take, TVA prepared an Environmental Impact Statement (EIS) in accordance with the National Environmental Policy Act. This EIS assesses the environmental and socioeconomic impacts of different policies to address the proliferation of floating cabins and nonnavigable houseboats on TVA's reservoirs. TVA released a draft of this EIS for public comment in June 2015 and held four public meetings and a webinar to provide information about its analyses and to facilitate public involvement. Public reaction to this situation widely varied.

Many members of the general public urged TVA to require the removal of all floating cabins because TVA's reservoirs are public resources and owners of floating cabins are occupying public areas. Floating cabin owners generally supported additional reasonable regulation of their structures but argued against policies requiring their removal because of the investments they have made in the structures. Other commenters had concerns about discharges of black (sewage) and gray (showers, sinks, etc.) water from floating cabins and shock and electrocution risks associated with the electrical connections to floating cabins. Commenting agencies consistently supported better regulation of floating cabins. The final EIS and associated documents can be found at https://www.tva.com/Environment/Shoreline-Construction/Floating-Cabins.

After considering the comments it received during the EIS process and its analyses of impacts, TVA identified as its preferred policy one that establishes standards for floating cabins to enhance compliance with applicable water quality discharge requirements set by other agencies, adherence to electrical safety codes, and location of floating cabins within identified harbor limits of commercial marinas. Under the preferred policy, the mooring of additional floating cabins would be prohibited on the Tennessee River System of which TVA reservoirs are a part. All existing floating cabins, including nonnavigable houseboats, would have to be removed from the Tennessee River System by January 1, 2036, and be subject to a regulatory program in the interim. On May 5, 2016, the TVA Board of Directors adopted the preferred policy with one exception—the Board changed the removal date to May 5, 2046.

On December 16, 2016, the Water Infrastructure Improvements for the Nation Act (WIIN Act) was enacted by the United States Congress. Title IV Section 5003 related to floating cabins and amended the TVA Act to include Section 9b. This new section of the TVA Act specifically addresses floating cabins and provides that TVA may allow the use of floating cabins where the structure was located on waters under TVA's jurisdiction as of December 16, 2016; and where the owner maintains the structure in accordance with reasonable health, safety, and environmental standards set by the TVA Board of Directors. Section 9b also states that TVA may establish regulations to prevent the construction of new floating cabins and may levy fees to ensure compliance.

Section 9b provides the circumstances under which TVA may require the removal of existing floating cabins; i.e., those located on waters under TVA's jurisdiction as of December 16, 2016. For existing floating cabins that have a TVA permit as of December 16, 2016, TVA may not require their removal for 15 years; i.e., until December 16, 2031. For existing floating cabins without permits on December 16, 2016, TVA may not require their removal for five years; i.e., until December 16, 2021. During these 15- and 5-year periods, however, TVA may levy necessary and reasonable fees to ensure compliance with TVA's regulations. The new legislation also provides that, with respect to existing floating cabins, TVA “shall approve and allow the use of the floating cabin on waters under the jurisdiction of [TVA] at such time and for such duration as (i) the floating cabin meets the requirements of [16 U.S.C. 831h-3(b)]; and (ii) the owner of the floating cabin has paid any fee assessed pursuant to [16 U.S.C. 831h-3(c)].” 16 U.S.C. 831h-3(d)(1)(B).

Section 9b of the TVA Act defines “floating cabin” as a watercraft or other floating structure (1) primarily designed and used for human habitation or occupation; and (2) not primarily designed or used for navigation or transportation on the water. This final rule clarifies the type of structure that TVA will regulate as a floating cabin and updates TVA's regulations to clarify that floating cabins placed on TVA waters after December 16, 2016, are prohibited. The final rule also establishes limited mooring requirements; clarifies limitations on expansions; and requires all owners of floating cabins to register their structures with TVA by January 1, 2020, regardless of whether they already have a Section 26a permit. Although this deadline allows plenty of time for owners to register their floating cabins, TVA encourages owners to begin the registration process without delay. A subsequent rulemaking will address: (1) The permitting process for existing floating cabins; (2) health, safety, and environmental standards; and (3) fees.

Floating Cabins

To more clearly describe the type of floating structure that TVA regulates, the term “nonnavigable houseboat” will be replaced in TVA's Section 26a regulations with the term “floating cabin,” the term adopted by Congress in the WIIN Act. Floating cabins are structures determined by TVA, in its sole judgment, to be designed and used primarily for human habitation or occupation and not designed or used primarily for navigation or transportation on the water. TVA's judgment will be guided by, but not limited to, the following factors:

1. Whether the structure is usually kept at a fixed mooring point;

2. Whether the structure is actually used on a regular basis for transportation or navigation;

3. Whether the structure has a permanent or continuous connection to the shore for electrical, plumbing, water, or other utility service;

4. Whether the structure has the performance characteristics of a vessel typically used for navigation or transportation on the water;

5. Whether the structure can be readily removed from the water;

6. Whether the structure is used for intermittent or extended human-habitation or occupancy;

7. Whether the structure clearly has a means of propulsion and appropriate power/size ratio;

8. Whether the structure is safe to navigate or use for transportation purposes.

Mooring

Existing floating cabins, i.e., those located on the Tennessee River System on or before December 16, 2016, may continue to be moored in the following locations: Within harbor limits of a commercial marina; if the floating cabin is not associated with a marina, along shoreline approved in writing by TVA on or before December 16, 2016; where moored prior to December 16, 2016, along shoreline where land rights exist for a Section 26a permit; or, where moored prior to December 16, 2016, along shoreline where the owner of the floating cabin is the owner or lessee of the proposed mooring location. To prevent sprawl and to better contain the impacts of floating cabins, TVA will not allow an existing floating cabin to relocate except to the harbor limits of a commercial marina that complies with 18 CFR 1304.404, the TVA regulation governing commercial marina harbor limits. In some cases, existing floating cabins moored at a commercial marina are located outside of the designated harbor limits or the marina's land ownership has changed since the harbor limits were originally designated. In these and other situations, TVA may require a floating cabin to relocate to another location within the marina's harbor limits. Relocations to alternate marinas would require advance approval from TVA in the form of a new permit.

Dock Size

Separate from the amendments to regulations concerning floating cabins, the final rule would result in a minor change to clarify TVA's intent concerning the size of some water-use facilities (e.g., docks). The current regulation requires water-use facilities to be sited within a 1000-square-foot rectangular or square area. The proposed change would allow some water-use facilities to be as large as 1800 square feet, but only in one of two circumstances (1) where the water-use facility will be located in a subdivision recorded before November 1, 1999, and TVA permitted at least one water-use facility in the subdivision prior to November 1, 1999; or (2) if there is no subdivision, where the water-use facility will be located within a quarter-mile radius of another water-use facility that TVA permitted prior to November 1, 1999. TVA's current waiver or variance provisions, set forth in §§ 1304.212 and 1304.408 respectively, may allow even larger facilities where an applicant requests and justifies a waiver or variance, but such allowances shall be made in TVA's discretion and on a case-by-case basis.

Comments on the Proposed Rule and TVA's Responses

TVA received 32 comments during the public review period consisting of three letters and 29 emails. This includes one comment that TVA received after the comment-close date, which TVA will include. Comments were received from 28 individuals and four representatives of nongovernmental organizations. The following discussion describes the comments received, provides TVA's response to the comments, and describes changes, if any, made by TVA to the rule based on the comments. Although several of the submitted comments do not pertain to the proposed rule published on January 17, 2018, TVA appreciates the perspectives, interests, and concerns expressed by all commenters.

Some of the comments were outside the scope of this rule and were more germane to the next phase of rulemaking where TVA will address: (1) The permitting process for existing floating cabins; (2) health, safety, and environmental standards; and (3) fees. Since August 2017, TVA has worked with a representative stakeholder group to develop more detailed rules and standards to guide future regulation of floating cabins. TVA expects to publish this second proposed rule and take public comments at a later date in 2018.

1. Comments Related to Other 26a-Permitted Structures and the Need for 26a Regulations

Comment: Some commenters stated that TVA's regulations, standards, inspections, and fees should not discriminate against floating cabin owners and should apply consistently to all structures on TVA reservoirs such as private residential docks. Commenters asserted it is unfair and unreasonable to treat floating cabins differently from other 26a permitted structures. Some commenters stated that TVA is focusing on something that has never been a problem and docks are far more dangerous to navigation.

TVA Response: Section 26a of the TVA Act requires the advance written approval of TVA for all floating cabins, private residential docks, and other obstructions. Since 1971 TVA has recognized the necessity to prohibit construction of new nonnavigable houseboats (the early version of floating cabins) and establish regulations exclusively for their authorization and management on TVA reservoirs. This was due to their unique nature as a habitable enclosed structure, amenities, and their impacts on navigation, public land, and water quality. The 2016 WIIN Act allows existing floating cabins to remain on the water only if the owner maintains the structure in accordance with reasonable health, safety, and environmental standards set by the TVA Board of Directors.

TVA has previously established corresponding standards for private residential water use facilities. Subparts C and D of the TVA Section 26a regulations set forth the standards for private water use facilities such as boat docks in substantial detail and restrict these facilities in ways that floating cabins are not restricted. For example, living space or sleeping areas are prohibited; enclosed space is limited to 32 square feet for storage; and toilets, sinks, and electrical appliances are not allowed. Electrical lines and service to private docks must be installed in compliance with all State and local electrical codes (satisfactory evidence of compliance to be provided to TVA upon request); and electrical service must be installed with an electrical disconnect that is located above the 500-year floodplain or flood risk profile whichever is higher, and is accessible during flood events.

Floating cabins raise unique safety concerns because many have electrical service supplied by submerged electrical lines, and many are equipped with household appliances.

Concerning the impact of floating cabins, in its Environmental Impact Statement, TVA used an extensive amount of existing information and additional data collection and analysis to support its finding of potential impacts to human health and the environment from floating cabins. The finding of potential impacts are based on existing information, literature on the known effects on resources, comments by agencies and the public about impacts that they experience, internal TVA resource specialists, and professional judgment. The potential adverse impacts from sewage discharges into public waterways and the risk and potential harm to the public safety from poorly maintained electrical wiring are well established and understood. TVA acknowledged that the severity of current impacts is not well-sourced in available information. For example, TVA states that adverse water quality impacts cannot currently be associated with floating cabins, but available information, including the literature, supports TVA's conclusion that the severity of impacts will increase if the proliferation of floating cabins is not controlled and operating standards are not established. It is appropriate that TVA acts to address such potential impacts before they become severe.

2. Comments Related to Vessels

Comment: I fail to see the distinction between my in-harbor water access for which I pay a monthly marina fee and TVA gets money from the marinas and the distinction between houseboats who move twice a year, and certainly between docks that literally jut out into the water in public (non-harbor-limits) that are not subject to annual fees as is proposed.

TVA Response: TVA is authorized by the WIIN Act to charge compliance fees for floating cabins. Additionally, permit requests for private water use facilities such as docks are usually considered only where the applicant owns the shoreline, or as an adjacent landowner possesses the necessary deeded land rights over TVA land to the reservoir.

TVA does not promulgate rules for vessels, only for obstructions. Vessels such as factory houseboats and wake board boats are regulated by the States and the U.S. Coast Guard. The States mandate and charge for vessel registration. EPA and the Coast Guard issue rules for the proper handling of sewage and waste from vessels. The Coast Guard regulates the building and manufacturing of recreational boats including houseboats under 33 CFR part 183. This includes regulation of electrical and fuel systems, ventilation, loading capacity, and flotation requirements.

Habitable structures such as floating cabins are subject to the same local, state, and federal laws and ordinances for management of sewage and waste water that apply to residences on land.

Comment: Why do factory houseboats get to dump their grey water in the lake and no one goes after them or wake board boats get to intake water and then release out as grey water. Consider these differences in your evaluation as it seems to be so one-sided.

TVA Response: The regulation of black water and gray water discharges is outside the scope of this rulemaking, but TVA notes that such discharges are regulated by the Coast Guard for vessels and by state agencies that are responsible for issuing National Pollutant Discharge Elimination System (NPDES) permits for facilities that discharge sewage or other wastewaters.

3. TVA's Interest in Safety Associated With Other Structures

Comment: TVA has no interest in safety issues on shoreline docks and factory houseboats and there are far more of these in bad condition that should be subject to inspections.

TVA Response: TVA disagrees. Current TVA Section 26a regulations and all permits require the owner to complete the approved facility in accordance with approved plans, and maintain it in a good state of repair and in good, safe, and substantial condition. If a facility is found to be in violation of the permit or in abandoned or derelict condition, the permit can be revoked and the owner required to remove the facility. TVA performs periodic compliance inspections along the shoreline to review existing facilities and detect violations. Also, see response to Comment Group 1.

The States are responsible for enforcing boating laws, and the Coast Guard regulates the building and manufacturing of recreational boats including houseboats under 33 CFR part 183. This involves areas such as electrical and fuel systems, ventilation, loading capacity, and flotation requirements.

4. Comments Related to a Sunset Provision

Comment: I request that you not overreach on Section 9b of the act thus creating a sunset, even though the sunset provision was overturned in the Water Rights Act.

TVA Response: TVA will comply with Section 9b of the TVA Act as directed by the 2016 WIIN Act. There is no sunset provision in any existing or proposed regulations for floating cabins.

Comment: I believe that our sizable investment should remain for us, our kids and our grandkids. Our “floating cabin” is within the harbor boundaries of a very nice marina, out of the main traffic flow, has holding tanks for both black and gray water and a signed contract for weekly pump outs. In addition, insurance is mandatory, as are slip fees for both our “floating cabin” as well as our pontoon boat. With concern for my kids and grandkids who are just learning to boat, ski, swim and fish; we all insist on a clean and safe environment. In addition, these recreational activities provide countless jobs for the restaurants, marinas, shops and service providers in the area.

TVA Response: TVA will comply with Section 9b of the TVA Act as directed by the 2016 WIIN Act. There is no sunset provision in any existing or proposed regulations for floating cabins.

5. Comments That Pertain to the Next Phase of Rulemaking

Comment: Numerous commenters identified issues and made recommendations that do not pertain to the proposed amendments but will pertain to the next rulemaking phase. These included comments about the need for the following requirements: For sewage to be pumped or incinerated on board; for floating cabin owners to document the pump-out of sewage; for owners to maintain their floating cabins in a good state of repair; for TVA to offer a buy-back program to reduce the number of floating cabins; for TVA later to offer a limited number of permits back to the public; for floating cabins to be safe, clean, and well-maintained; for fees and regulations that incorporate the public's input and that take into account the impact on owners of floating cabins on Boone Reservoir; for a prohibition on the use of unencased Styrofoam; for mooring lines to have reflective markers or buoys at locations that show boaters the angle of the cables under the water; and for buoys, lights, and signs to warn of navigation and electrocution risks.

TVA Response: TVA acknowledges and appreciates these comments and anticipates the stated issues and recommendations will be addressed in the next rulemaking phase.

6. Comments Related to the Private Use of Public Waters and Water Quality

Comment: A number of commenters stated that they believed that floating cabins are an inappropriate private use of public resources. Floating cabins were referred to as “squatting” on public waters by one commenter who also urged a no expansion policy and complete compliance of these structures with all environmental and safety regulations. One commenter stated that any plan that allows floating cabins to remain is unacceptable. Another commenter stated that allowing people to live in floating cabins is unfair to the original landowners who had to leave their property when the dams were built. One commenter stated that TVA's mission requires the agency to preserve the environment by removing floating cabins from the river.

TVA Response: TVA will comply with the direction provided by the U.S. Congress in the WIIN Act of 2016, which established Section 9b of the TVA Act. That legislation underscored TVA's authority to regulate floating cabins, and expressly stated that TVA could prohibit floating cabins that were not located on waters under TVA's jurisdiction as of December 16, 2016. Thus, this final rule clarifies that new structures are prohibited, which will prevent the proliferation of new structures and allow TVA to remove such new structures.

With respect to existing floating cabins that were located on waters under TVA jurisdiction prior to or on December 16, 2016, the WIIN Act prohibits removal for a period of 5 or 15 years from December 16, 2016, depending on whether the existing floating cabin received a TVA permit prior to December 16, 2016. After that, existing floating cabins may remain if: Maintained in compliance with reasonable standards as required by the TVA Board; fees are paid that are necessary and reasonable for ensuring compliance; a Section 26a permit is obtained by the deadline provided in the next phase of rulemaking; and the floating cabin remains in compliance with the terms and conditions of the permit.

Comment: TVA has attempted unsuccessfully to reduce the mooring of floating cabins on the waters that it governs without using the full extent of its legal powers. This suggests that it is time for a more forceful solution. Furthermore, a 30-year grace period for removal of all existing houseboats is more than fair, given that the statute only requires 15 years to require removal. 16 U.S.C.A. 831h-3(d)(1)(A). While negative economic impacts on regulated parties are never desirable, preserving the nation's water quality is of paramount importance. Prioritizing the needs of floating cabin owners over those people who make their living off the pristine environment of the Tennessee River Basin is unfair, and short sighted. In order to fulfill the purpose of Tennessee Valley Authority to preserve the environment of this area while promoting unified economic development, these floating cabins must be removed from the river.

TVA Response: TVA recognizes the public's concern with this issue. In its Environmental Impact Statement, TVA's Preferred Policy would have required the removal of existing floating cabins after 30 years; however, Congress's passage of the WIIN Act prevents TVA from mandating removal after 30 years. The WIIN Act does underscore TVA's authority to prohibit new structures, however, which this final rule amendment clarifies. Only structures located on waters under TVA's jurisdiction by December 16, 2016 may remain, and those structures must comply with TVA's standards and fees. Structures installed after that date are prohibited, and TVA has the authority to remove them. Thus, the WIIN Act and this final rule help stop the proliferation of floating cabins.

7. Comments Related to TVA's Environmental Impact Statement and the 30-Year Sunset Policy That the TVA Board Adopted Prior to Passage of the WIIN Act of 2016

Comment: A few commenters objected to TVA's preferred alternative in TVA's Environmental Impact Statement to remove floating cabins by 2036, and the TVA Board's May 2016 Policy in which TVA determined that existing floating cabins should be removed by 2046. One commenter stated that TVA should change the removal date to 2036.

TVA Response: These comments pertain to the management alternatives considered in the Floating Houses Policy Review EIS (February 2016). Although the TVA Board approved a policy on May 5, 2016, incorporating Alternative B2 from TVA's EIS with a 30-year “sunset” provision, that policy has been modified by subsequent legislation. In particular, the WIIN Act of 2016 amended the TVA Act to prevent the removal of floating cabins where (1) the floating cabins remain in compliance with TVA standards and fees and (2) the floating cabins existed on waters under TVA's jurisdiction on or prior to December 16, 2016. Thus, there is no longer a sunset provision mandating removal of floating cabins in the future. As a result, Alternative B1 from TVA's EIS is being implemented for the future management of floating cabins.

8. Comments in Support of the Final Rule

Comment: Numerous commenters expressed general support for the final rule amendments. Many commented that TVA's documentation, inventory, registration and inspection of floating cabins is an appropriate way to ensure owners are accountable for properly maintaining their structures. Others emphasized that TVA should regularly and fairly enforce the regulations. One commented that the rule should apply to houseboats as well.

TVA Response: TVA acknowledges these comments and agrees with the need to have reasonable standards and rules, have consistent enforcement of regulations, and avoid any burdensome requirements. Fees will be set only to the extent needed to offset TVA's costs for ensuring compliance as contained in Section 9b of the TVA Act and as directed by the WIIN Act of 2016.

TVA does not regulate vessels or enforce boating laws. The States and the U.S. Coast Guard have this responsibility and authority. The Coast Guard regulates the building and manufacturing of recreational boats including houseboats under 33 CFR part 183. This involves areas such as electrical and fuel systems, ventilation, loading capacity, and flotation requirements.

This final rule contains no federal mandates for state, local, or tribal government or for the private sector. TVA has determined it will not have a significant annual effect of $100 million or more or result in expenditures of $100 million in any one year by state, local, or tribal governments or by the private sector. The rule will not have a substantial direct effect on the States or Indian tribes, on the relationship between the Federal Government and the States or Indian tribes, or on the distribution of power and responsibilities between the federal Government and States or Indian tribes. Nor will the rule have concerns for environmental health or safety risks that may disproportionately affect children, have significant effect on the supply, distribution, or use of energy, or disproportionally impact low-income or minority populations. Unified development and regulation of the Tennessee River System through an approval process for obstructions across, along, or in the river system, and management of United States-owned land entrusted to TVA are federal functions for which TVA is responsible under the TVA Act. In general, the final rule updates or clarifies TVA's regulations to align them with the status quo. First, the final rule clarifies that no new structures are allowed and codifies (1) an updated definition for floating, habitable structures that are allowable on TVA reservoirs; (2) where such structures may be located; and (3) the types of modifications that are allowed. The final rule also amends TVA's regulations to align better with its policy for allowing some obstructions, usually docks, to be larger than 1000 square feet. Accordingly, the rule has no implications for any of the referenced authorities, including the Presidential Executive Order on Reducing Regulation and Controlling Regulatory Costs dated January 30, 2017, which affects only “significant regulatory actions” as defined by Executive Order 12866.

B. Regulatory Flexibility Act

Under the Regulatory Flexibility Act, 5 U.S.C. 605, TVA is required to prepare a regulatory flexibility analysis unless the head of the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. The statute defines “small entity” as a “small business,” “small organization” (further defined as a “not-for-profit enterprise”), or a “small governmental jurisdiction.” Most applications for water-use facilities are submitted by residential landowners for personal use. Since residential landowners are not businesses, not-for-profit enterprises, or small governmental jurisdictions, there are relatively few “small entities” affected by TVA's final rule. Moreover, nothing in this rule significantly adds to the cost of applying for and constructing any regulated facility. Accordingly, this rule will not have a significant impact on a substantial number of small entities; no regulatory flexibility analysis is required; and TVA's Chief Executive Officer has made the requisite certification.

C. Paperwork Reduction Act

Title of Information Collection: Section 26a Permit Application.

Current OMB Approval Number: 3316-0060.

This rule contains information collection requirements for registration of floating cabins which have been submitted to the Office of Management and Budget (OMB) for approval. The information collection requirements under this rule will be included by amendment within the Section 26a Permit Application information collection. TVA provided burden information and requested comments on these requirements in the preamble to the proposed rule. No comments directed toward the information collection requirements were received.

The only information collection activity contained in the rule is a requirement that owners of floating cabins register them with TVA. The registration includes: Photographs of the structure, drawings showing the size and shape of the floating cabin and attached structures, such as decks or slips, in reasonable detail; and a completed and signed TVA registration form. The registration form includes the owner's mailing and contact information; the TVA permit or TVA-issued numbers; the mooring location; how the floating cabin is moored; how electrical service is provided; how waste water and sewage is managed; and an owner's signature.

The information is necessary and will be used pursuant to TVA Land Management activities and Section 26a of the Tennessee Valley Authority Act of 1933, as amended, which require TVA to collect information relevant to projects that will impact TVA land and land rights and review and approve plans for the construction, operation, and maintenance of any dam, appurtenant works, or other obstruction affecting navigation, flood control, or public lands or reservations across, along, or in the Tennessee River or any of its tributaries.

Respondents will be the owners of floating cabins. The estimated time to complete a registration is 2 hours. TVA estimates that, in the first year of the floating cabin registration process, the number of responses will increase from 1,500 to 3,700. Accordingly, the estimated burden will increase from 3,000 hours to 7,400 hours in the first year, and then return to about 3,000 hours in following years.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. TVA will publish a document in the Federal Register announcing OMB's approval.

This subpart prescribes requirements for floating cabins on the Tennessee River System. Floating cabins as applied to this subpart include existing nonnavigable houseboats approved by TVA and other existing structures, whose design and use is primarily for human habitation or occupation and not for navigation or transportation on the water. Floating cabins that were not located or moored on the Tennessee River System on or before December 16, 2016, shall be deemed new floating cabins. New floating cabins are prohibited and subject to the removal provisions of this part and Section 9b of the TVA Act. No new floating cabins shall be moored, anchored, or installed on the Tennessee River System. Floating cabins that were located or moored in the Tennessee River System on or before December 16, 2016 shall be deemed existing floating cabins. Existing floating cabins may remain moored on the Tennessee River System provided they remain in compliance with the rules in this part.

5. Amend § 1304.101:a. By revising the section heading and paragraphs (a) and (b);b. In paragraphs (c) introductory text and (c)(1) and (2) by removing the words “nonnavigable houseboat”, “Nonnavigable houseboats” and “nonnavigable houseboats” and adding in their place the words “floating cabin”, “Floating cabins” and “floating cabins”, respectively, wherever they appear;c. By revising paragraph (d);d. In paragraph (e) by removing the words “nonnavigable houseboats” and adding in their place the words “floating cabins”;e. In paragraph (f) by removing the words “nonnavigable houseboat” and adding in their place the words “floating cabin”; andf. By adding paragraph (g).

The revisions and additions read as follows:

§ 1304.101 Floating cabins.

(a)(1) Floating cabins include nonnavigable houseboats approved by TVA on or before December 16, 2016, and other floating structures moored on the Tennessee River System as of this date, and determined by TVA in its sole discretion to be designed and used primarily for human habitation or occupation and not designed and used primarily for navigation or transportation on the water. TVA's judgment will be guided by, but not limited to, the following factors:

(i) Whether the structure is usually kept at a fixed mooring point;

(ii) Whether the structure is actually used on a regular basis for transportation or navigation;

(iii) Whether the structure has a permanent or continuous connection to the shore for electrical, plumbing, water, or other utility service;

(iv) Whether the structure has the performance characteristics of a vessel typically used for navigation or transportation on water;

(v) Whether the structure can be readily removed from the water;

(vi) Whether the structure is used for intermittent or extended human-habitation or occupancy;

(vii) Whether the structure clearly has a means of propulsion, and appropriate power/size ratio;

(viii) Whether the structure is safe to navigate or use for transportation purposes.

(2) That a structure could occasionally move from place to place, or that it qualifies under another federal or state regulatory program as a vessel or boat, are factors that TVA also will consider but would not be determinative. Floating cabins are not recreational vessels to which § 1304.409 applies.

(b)(1) Owners of floating cabins are required to register the floating cabin with TVA before January 1, 2020. Floating cabin owners must submit certain required information with their registration. Registration shall include the following information: Clear and current photographs of the structure; a drawing or drawings showing in reasonable detail the size and shape of the floating cabin (length, width, and height) and attached structures, such as decks or slips (length, width, and height); and a completed and signed TVA registration form. The completed TVA registration form shall include the mailing and contact information of the owner(s); the TVA permit or TVA-issued numbers (when applicable); the mooring location of the floating cabin; how the floating cabin is moored; how electrical service is provided; how waste water and sewage is managed; and an owner's signature.

(2) Existing floating cabins may remain on TVA reservoirs provided they stay in compliance with the rules contained in this part and pay any necessary and reasonable fees levied by TVA to ensure compliance with TVA's regulations. Existing floating cabins must be moored at one of the following locations:

(i) To the bank of the reservoir at locations where the owner of the floating cabin is the owner or lessee (or the licensee of such owner or lessee) of the proposed mooring location provided the floating cabin was moored at such location prior to December 16, 2016;

(ii) At locations described by § 1304.201(a)(1), (2), and (3) provided the floating cabin was moored at such location prior to December 16, 2016;

(iii) To the bank of the reservoir at locations where the owner of the floating cabin obtained written approval from TVA pursuant to subpart A of this part authorizing mooring at such location on or before December 16, 2016; or

(iv) Within the designated and approved harbor limits of a commercial marina that complies with § 1304.404. As provided in § 1304.404, TVA may adjust harbor limits and require relocation of an existing floating cabin within the harbor limits. Accordingly, in the case of relocations that occur after December 16, 2016, an existing floating cabin can relocate only to the harbor limits of a commercial marina that complies with § 1304.404.

(3) All floating cabins must be moored in such a manner as to:

(i) Avoid obstruction of or interference with navigation, flood control, public lands or reservations;

(ii) Avoid adverse effects on public lands or reservations;

(iii) Prevent the preemption of public waters when moored in permanent locations outside of the approved harbor limits of commercial marinas;

(iv) Protect land and landrights owned by the United States alongside and subjacent to TVA reservoirs from trespass and other unlawful and unreasonable uses; and

(v) Maintain, protect, and enhance the quality of the human environment.

(d) Existing floating cabins shall be maintained in a good state of repair and may be maintained without additional approval from TVA. Existing floating cabins may be rebuilt to the same configuration, total footprint, and dimensions (length, width, and height) as permitted without additional TVA approval. Owners are required to notify TVA thirty days in advance and submit their proposed plans for rebuilding the floating cabin. Within thirty days of completion, owners must submit a photo of the rebuilt floating cabin for TVA's records. Any expansion in length, width, or height is prohibited, except as approved in writing by TVA and necessary to comply with health, safety, and environmental requirements.

(g) All floating cabins not in compliance with this part are subject to the applicable removal provisions of § 1304.406 and Section 9b of the TVA Act.

6. Amend § 1304.102 by:a. Revising the section heading;b. In paragraphs (a) and (b), removing the words “nonnavigable houseboat” and “nonnavigable houseboats” and adding in their place the words “floating cabin” and “floating cabins”, respectively, wherever they appear;c. Adding a sentence to the end of paragraph (a)' andd. Revising paragraph (c).

The addition and revisions read as follows:

§ 1304.102 Numbering of floating cabins and transfer of ownership.

(a) * * * If TVA provided a placard or tag, the tag must be displayed on a readily visible part of the outside of the floating cabin.

(c) A floating cabin moored at a location approved pursuant to the regulations in this subpart shall not be relocated and moored at a different location without prior approval by TVA, except for movement to a new location within the designated harbor limits of the same commercial dock or marina.

(a) Docks, piers, boathouses, and all other residential water-use facilities shall not exceed a total footprint area of greater than 1,000 square feet, unless the proposed water-use facility will be located in an area of preexisting development. For the purpose of this regulation, “preexisting development” means either: The water-use facility will be located in a subdivision recorded before November 1, 1999, and TVA permitted at least one water-use facility in the subdivision prior to November 1, 1999; or if there is no subdivision, where the water-use facility will be located within a quarter-mile radius of another water-use facility that TVA permitted prior to November 1, 1999. TVA may allow even larger facilities where an applicant requests and justifies a waiver or variance, set forth in §§ 1304.212 and 1304.408 respectively, but such waivers or variances shall be made in TVA's discretion and on a case-by-case basis.

(b) Docks, boatslips, piers, and fixed or floating boathouses are allowable. These and other water-use facilities associated with a lot must be sited within a 1,000- or 1,800-square-foot rectangular or square area as required by § 1304.204(a) at the lakeward end of the access walkway that extends from the shore to the structure. Access walkways to the water-use structure are not included in calculating the 1,000- or 1,800-square foot area.

(n) Except for floating cabins approved in accordance with subpart B of this part, toilets and sinks are not permitted on water-use facilities.

§ 1304.406 [Amended]9. Amend § 1304.406 in the first sentence by removing the words “nonnavigable houseboat” and adding in their place the words “floating cabin”.10. Amend § 1304.412 by:a. Adding in alphabetical order definitions for “Existing floating cabin” and “New floating cabin”;b. Removing the definition of “Nonnavigable houseboat”; andc. Adding in alphabetical order definitions for “Rebuilding” and “Tennessee River System”.

The additions read as follows:

§ 1304.412 Definitions.

Existing floating cabin means a floating cabin that was located or moored on the Tennessee River System on or before December 16, 2016.

New floating cabin means a floating cabin that was not located or moored on the Tennessee River System on or before December 16, 2016.

Rebuilding means replacement of all or a significant portion of an approved obstruction to the same configuration, total footprint, and dimensions (length, width, and height) as the approved plans, standards, and conditions of the Section 26a permit.

Tennessee River System means TVA reservoirs, the Tennessee River or any of the Tennessee River's tributaries.

The Acting Administrator of the Drug Enforcement Administration is issuing this temporary scheduling order to schedule the synthetic cathinone, 1-(1,3-benzodioxol-5-yl)-2-(ethylamino)-pentan-1-one (N-ethylpentylone, ephylone) and its optical, positional, and geometric isomers, salts, and salts of isomers in schedule I. This action is based on a finding by the Acting Administrator that the placement of N-ethylpentylone in schedule I of the Controlled Substances Act (CSA) is necessary to avoid an imminent hazard to the public safety. As a result of this order, the regulatory controls and administrative, civil, and criminal sanctions applicable to schedule I controlled substances will be imposed on persons who handle (manufacture, distribute, reverse distribute, import, export, engage in research, conduct instructional activities or chemical analysis, or possess), or propose to handle N-ethylpentylone.

DATES:

This temporary scheduling order is effective August 31, 2018, until August 31, 2020. If this order is extended or made permanent, the DEA will publish a document in the Federal Register.

Section 201 of the CSA, 21 U.S.C. 811, provides the Attorney General with the authority to temporarily place a substance in schedule I of the CSA for two years without regard to the requirements of 21 U.S.C. 811(b) if he finds that such action is necessary to avoid an imminent hazard to the public safety. 21 U.S.C. 811(h)(1). In addition, if proceedings to control a substance permanently are initiated under 21 U.S.C. 811(a)(1) while the substance is temporarily controlled under section 811(h), the Attorney General may extend the temporary scheduling 1 for up to one year. 21 U.S.C. 811(h)(2).

1 Though DEA has used the term “final order” with respect to temporary scheduling orders in the past, this document adheres to the statutory language of 21 U.S.C. 811(h), which refers to a “temporary scheduling order.” No substantive change is intended.

Where the necessary findings are made, a substance may be temporarily scheduled if it is not listed in any other schedule under section 202 of the CSA, 21 U.S.C. 812, or if there is no exemption or approval in effect for the substance under section 505 of the Federal Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. 355. 21 U.S.C. 811(h)(1). The Attorney General has delegated scheduling authority under 21 U.S.C. 811 to the Administrator of the DEA. 28 CFR 0.100.

Background

Section 201(h)(4) of the CSA, 21 U.S.C. 811(h)(4), requires the Administrator to notify the Secretary of the Department of Health and Human Services (HHS) of his intention to temporarily place a substance in schedule I of the CSA.2 The Acting Administrator transmitted notice of his intent to place N-ethylpentylone in schedule I on a temporary basis to the Acting Assistant Secretary for Health of HHS by letter dated November 22, 2017. The Acting Assistant Secretary responded to this notice of intent by letter dated December 13, 2017, and advised that based on a review by the Food and Drug Administration (FDA), there are currently no active investigational new drug applications or approved new drug applications for N-ethylpentylone. The Acting Assistant Secretary also stated that HHS has no objection to the temporary placement of N-ethylpentylone in schedule I of the CSA. The DEA has taken into consideration the Assistant Secretary's comments as required by 21 U.S.C. 811(h)(4). N-Ethylpentylone is not currently listed in any schedule under the CSA, and no exemptions or approvals are in effect for this substance under section 505 of the FDCA, 21 U.S.C. 355. The DEA has found that the control of N-ethylpentylone in schedule I on a temporary basis is necessary to avoid an imminent hazard to the public safety, and as required by 21 U.S.C. 811(h)(1)(A), a notice of intent to temporarily schedule N-ethylpentylone was published in the Federal Register on June 13, 2018. 83 FR 27520.

2 As discussed in a memorandum of understanding entered into by the Food and Drug Administration (FDA) and the National Institute on Drug Abuse (NIDA), the FDA acts as the lead agency within the HHS in carrying out the Secretary's scheduling responsibilities under the CSA, with the concurrence of NIDA. 50 FR 9518, Mar. 8, 1985. The Secretary of the HHS has delegated to the Assistant Secretary for Health of the HHS the authority to make domestic drug scheduling recommendations. 58 FR 35460, July 1, 1993.

To find that placing a substance temporarily in schedule I of the CSA is necessary to avoid an imminent hazard to the public safety, the Administrator is required to consider three of the eight factors set forth in 21 U.S.C. 811(c): The substance's history and current pattern of abuse; the scope, duration and significance of abuse; and what, if any, risk there is to the public health. 21 U.S.C. 811(h)(3). Consideration of these factors includes actual abuse, diversion from legitimate channels, and clandestine importation, manufacture, or distribution. 21 U.S.C. 811(h)(3).

A substance meeting the statutory requirements for temporary scheduling may only be placed in schedule I. 21 U.S.C. 811(h)(1). Substances in schedule I are those that have a high potential for abuse, no currently accepted medical use in treatment in the United States, and a lack of accepted safety for use under medical supervision. 21 U.S.C. 812(b)(1).

Available data and information for N-ethylpentylone, summarized below, indicate that this synthetic cathinone has a high potential for abuse, no currently accepted medical use in treatment in the United States, and a lack of accepted safety for use under medical supervision. The DEA's three-factor analysis and the Assistant Secretary's December 13, 2017 letter are available in their entirety under the tab “Supporting Documents” of the public docket of this action at www.regulations.gov under FDMS Docket ID: DEA-2018-0011 (Docket Number DEA-482).

N-Ethylpentylone

Around 2014, the synthetic cathinone, N-ethylpentylone, emerged in the United States' illicit drug market after the scheduling of other popular synthetic cathinones (e.g., ethylone, 4-methyl-N-ethylcathinone (4-MEC), mephedrone, methylone, pentylone, and 3,4-methylenedioxypyrovalerone (MDPV)). The identification of N-ethylpentylone in forensic evidence and overdose deaths indicates that this substance is being misused and abused. Law enforcement encounters include those reported to the National Forensic Laboratory Information System (NFLIS), a DEA sponsored program that systematically collects drug identification results and associated information from drug cases analyzed by Federal, State, and local forensic laboratories, the System to Retrieve Information from Drug Evidence (STRIDE), a federal database for the drug samples analyzed by DEA forensic laboratories, and STARLiMS (a web-based, commercial laboratory information management system that replaced STRIDE in 2014). Forensic laboratories have analyzed drug exhibits received from Federal, State, or local, law enforcement agencies that were found to contain N-ethylpentylone.3 NFLIS registered over 6,000 reports from state and local forensic laboratories identifying this substance in drug-related exhibits for a period from January 2013 to December 2017 from 41 states. There were no occurrences of N-ethylpentylone reported in NFLIS for 2013. N-Ethylpentylone was first identified in NFLIS in May 2014. STRIDE/STARLiMS registered over 300 reports from DEA forensic laboratories from January 2013 to December 2017. There were no occurrences of N-ethylpentylone reported in STRIDE/STARLiMS for 2013. N-Ethylpentylone was first reported to STRIDE/STARLiMS in December 2015. Additionally, U.S. Customs and Border Protection (CBP) encounters of N-ethylpentylone have occurred.

3 NFLIS and STRIDE/STARLiMS databases were queried on February 8, 2018.

N-Ethylpentylone, like other synthetic cathinones, is a designer drug of the phenethylamine class and it is pharmacologically similar to schedule I synthetic cathinones (e.g., cathinone, methcathinone, mephedrone, methylone, pentylone, and MDPV) and well-known schedule I and II sympathomimetic agents (e.g., methamphetamine, 3,4-methylenedioxymethamphetamine (MDMA), and cocaine). N-ethylpentylone, similar to these substances, causes stimulant related psychological and somatic effects. Consequently, there have been documented reports of emergency room admissions and numerous deaths associated with the abuse of N-ethylpentylone. No approved medical use has been identified for this substance, nor has it been approved by the FDA for human consumption.

Factor 4. History and Current Pattern of Abuse

N-Ethylpentylone is a synthetic cathinone of the phenethylamine class and it is structurally and pharmacologically similar to cathinone, methcathinone, mephedrone, methylone, pentylone, MDPV, methamphetamine, MDMA, and other schedule I and II substances. Thus, it is highly likely that N-ethylpentylone is abused in the same manner and by the same users as these substances. That is, N-ethylpentylone, like these substances, is most likely ingested by swallowing capsules or tablets or snorted by nasal insufflation of the powder tablets. Products containing N-ethylpentylone, similar to schedule I synthetic cathinones, are likely to be falsely marketed as “research chemicals,” “jewelry cleaner,” “stain remover,” “plant food or fertilizer,” “insect repellants” or “bath salts,” sold at smoke shops, head shops, convenience stores, adult book stores, and gas stations, and purchased on the internet. Like those seen with commercial products that contain synthetic cathinones, the packages of products that contain N-ethylpentylone also probably contain the warning “not for human consumption,” most likely in an effort to circumvent statutory restrictions for these substances. Demographic data collected from published reports and mortality records suggest that the main users of N-ethylpentylone, similar to schedule I synthetic cathinones and MDMA, are young adults.

Available evidence suggests that the history and pattern of abuse of N-ethylpentylone parallels that of MDMA, methamphetamine, or cocaine and that N-ethylpentylone has been marketed as a replacement for these substances. N-Ethylpentylone has been identified in law enforcement seizures that were initially suspected to be MDMA. In addition, there are reports that abusers of N-ethylpentylone thought they were using

MDMA or another illicit substance but toxicological analysis revealed that the psychoactive substance was N-ethylpentylone. Toxicology reports also revealed that N-ethylpentylone is being ingested with other substances including other synthetic cathinones, common cutting agents, or other recreational substances. Consequently, products containing synthetic cathinones, including N-ethylpentylone, are distributed to users, often with unpredictable outcomes. Thus, the recreational abuse of synthetic cathinones, including N-ethylpentylone, is a significant concern.

Factor 5. Scope, Duration and Significance of Abuse

N-Ethylpentylone is a popular recreational drug that emerged on the United States' illicit drug market after the scheduling of other popular synthetic cathinones (e.g., ethylone, mephedrone, methylone, pentylone, and MDPV) (see DEA 3-Factor Analysis for a full discussion). Forensic laboratories have confirmed the presence of N-ethylpentylone in drug exhibits received from state, local, and federal law enforcement agencies. Law enforcement data show that N-ethylpentylone first appeared in the illicit drug market in 2014 with one encounter and began increasing thereafter.4 In 2015, NFLIS registered five reports from three states regarding N-ethylpentylone. However, in 2016, there were 2,074 reports from 39 states and, in 2017, there were 3,955 reports from 39 states related to this substance registered in NFLIS. N-Ethylpentylone represented 60% of all synthetic cathinones encountered by local law enforcement agencies and reported to NFLIS in 2017. From January 2013 to December 2017, NFLIS registered 6,035 reports from state and local forensic laboratories identifying this substance in drug-related exhibits from 41 states. STRIDE/STARLiMS registered over 338 reports from DEA forensic laboratories during January 2013 to December 2017. There were no occurrences of N-ethylpentylone reported in NFLIS or STRIDE/STARLiMS for 2013. Additionally, seizures of N-ethylpentylone have occurred by the U.S. Customs and Border Protection (CBP) beginning in 2016. Concerns over the continuing abuse of synthetic cathinones have led to the control of many synthetic cathinones.

4 NFLIS and STRIDE/STARLiMS databases were queried on February 8, 2018.

Factor 6. What, if Any, Risk There Is to the Public Health

The identification of N-ethylpentylone in toxicological samples associated with fatal and non-fatal overdoses have been reported in medical and scientific literature, forensic laboratory reports, and public health documents. Like schedule I synthetic cathinones, N-ethylpentylone has caused acute health problems leading to emergency department (ED) admissions, violent behaviors causing harm to self or others, and/or death. Adverse health effects associated with the abuse of N-ethylpentylone include a number of stimulant-like adverse health effects such as diaphoresis, insomnia, mydriasis, hyperthermia, vomiting, agitation, disorientation, paranoia, abdominal pain, cardiac arrest, respiratory failure, and coma. In addition, N-ethylpentylone has been involved in deaths of many individuals. The DEA is aware of approximately 151 overdose deaths involving N-ethylpentylone abuse reported in the United States between 2014 and 2018. Thus, the abuse of N-ethylpentylone, like that of the abuse of schedule I synthetic cathinones and stimulant drugs, poses significant adverse health risks. Furthermore, because abusers of synthetic cathinones obtain these substances through unregulated sources, the identity, purity, and quantity are uncertain and inconsistent. These unknown factors pose an additional risk for significant adverse health effects to the end user.

Based on information received by the DEA, the misuse and abuse of N-ethylpentylone has led to, at least, the same qualitative public health risks as schedule I synthetic cathinones, MDMA, and methamphetamine. The public health risks attendant to the abuse of synthetic cathinones, including N-ethylpentylone, are well established and have resulted in large numbers of ED visits and fatal overdoses.

Finding of Necessity of Schedule I Placement To Avoid an Imminent Hazard to the Public Safety

In accordance with 21 U.S.C. 811(h)(3), based on the available data and information, summarized above, the uncontrolled manufacture, distribution, reverse distribution, importation, exportation, conduct of research and chemical analysis, possession, and/or abuse of N-ethylpentylone poses an imminent hazard to the public safety. The DEA is not aware of any currently accepted medical uses for this substance in the United States. A substance meeting the statutory requirements for temporary scheduling, 21 U.S.C. 811(h)(1), may only be placed in schedule I. Substances in schedule I are those that have a high potential for abuse, no currently accepted medical use in treatment in the United States, and a lack of accepted safety for use under medical supervision. Available data and information for N-ethylpentylone indicate that this synthetic cathinone has a high potential for abuse, no currently accepted medical use in treatment in the United States, and a lack of accepted safety for use under medical supervision. As required by section 201(h)(4) of the CSA, 21 U.S.C. 811(h)(4), the Acting Administrator, through a letter dated November 22, 2017, notified the Acting Assistant Secretary of the DEA's intention to temporarily place this substance in schedule I. A notice of intent was subsequently published in the Federal Register on June 13, 2018. 83 FR 27520.

Conclusion

In accordance with the provisions of section 201(h) of the CSA, 21 U.S.C. 811(h), the Acting Administrator considered available data and information, herein set forth the grounds for his determination that it is necessary to temporarily schedule N-ethylpentylone in schedule I of the CSA, and finds that placement of N-ethylpentylone in schedule I of the CSA is necessary in order to avoid an imminent hazard to the public safety.

Because the Acting Administrator hereby finds that it is necessary to temporarily place N-ethylpentylone in schedule I to avoid an imminent hazard to the public safety, this temporary order scheduling this substance is effective on the date of publication in the Federal Register, and is in effect for a period of two years, with a possible extension of one additional year, pending completion of the regular (permanent) scheduling process. 21 U.S.C. 811(h)(1) and (2).

The CSA sets forth specific criteria for scheduling a drug or other substance. Permanent scheduling actions in accordance with 21 U.S.C. 811(a) are subject to formal rulemaking procedures done “on the record after opportunity for a hearing” conducted pursuant to the provisions of 5 U.S.C. 556 and 557. 21 U.S.C. 811. The permanent scheduling process of formal rulemaking affords interested parties with appropriate process and the government with any additional relevant information needed to make a determination. Final decisions that conclude the permanent scheduling process of formal rulemaking are subject to judicial review. 21 U.S.C. 877. Temporary scheduling orders are not subject to judicial review. 21 U.S.C. 811(h)(6).

Requirements for Handling

Upon the effective date of this temporary order, N-ethylpentylone will be subject to the regulatory controls and administrative, civil, and criminal sanctions applicable to the manufacture, distribution, reverse distribution, importation, exportation, engagement in research, and conduct of instructional activities or chemical analysis with, and possession of schedule I controlled substances including the following:

1. Registration. Any person who handles (manufactures, distributes, reverse distributes, imports, exports, engages in research, or conducts instructional activities or chemical analysis with, or possesses), or who desires to handle, N-ethylpentylone must be registered with the DEA to conduct such activities pursuant to 21 U.S.C. 822, 823, 957, and 958, and in accordance with 21 CFR parts 1301 and 1312, as of August 31, 2018. Any person who currently handles N-ethylpentylone, and is not registered with the DEA, must submit an application for registration and may not continue to handle N-ethylpentylone as of August 31, 2018, unless the DEA has approved that application for registration pursuant to 21 U.S.C. 822, 823, 957, and 958, and in accordance with 21 CFR parts 1301 and 1312. Retail sales of schedule I controlled substances to the general public are not allowed under the CSA. Possession of any quantity of this substance in a manner not authorized by the CSA on or after August 31, 2018 is unlawful and those in possession of any quantity of this substance may be subject to prosecution pursuant to the CSA.

2. Disposal of stocks. Any person who does not desire or is not able to obtain a schedule I registration to handle N-ethylpentylone must surrender all currently held quantities of N-ethylpentylone.

3. Security. N-ethylpentylone is subject to schedule I security requirements and must be handled and stored pursuant to 21 U.S.C. 821, 823, 871(b), and in accordance with 21 CFR 1301.71-1301.93, as of August 31, 2018.

4. Labeling and Packaging. All labels, labeling, and packaging for commercial containers of N-ethylpentylone must be in compliance with 21 U.S.C. 825, 958(e), and be in accordance with 21 CFR part 1302. Current DEA registrants shall have 30 calendar days from August 31, 2018, to comply with all labeling and packaging requirements.

5. Inventory. Every DEA registrant who possesses any quantity of N-ethylpentylone on the effective date of this order must take an inventory of all stocks of this substance on hand, pursuant to 21 U.S.C. 827 and 958, and in accordance with 21 CFR 1304.03, 1304.04, and 1304.11. Current DEA registrants shall have 30 calendar days from the effective date of this order to be in compliance with all inventory requirements. After the initial inventory, every DEA registrant must take an inventory of all controlled substances (including N-ethylpentylone) on hand on a biennial basis, pursuant to 21 U.S.C. 827 and 958, and in accordance with 21 CFR 1304.03, 1304.04, and 1304.11.

6. Records. All DEA registrants must maintain records with respect to N-ethylpentylone pursuant to 21 U.S.C. 827 and 958(e), and in accordance with 21 CFR parts 1304, 1312, 1317 and § 1307.11. Current DEA registrants authorized to handle N-ethylpentylone shall have 30 calendar days from the effective date of this order to be in compliance with all recordkeeping requirements.

7. Reports. All DEA registrants who manufacture or distribute N-ethylpentylone must submit reports pursuant to 21 U.S.C. 827 and in accordance with 21 CFR parts 1304 and 1312 as of August 31, 2018.

8. Order Forms. All DEA registrants who distribute N-ethylpentylone must comply with order form requirements pursuant to 21 U.S.C. 828 and in accordance with 21 CFR part 1305 as of August 31, 2018.

9. Importation and Exportation. All importation and exportation of N-ethylpentylone must be in compliance with 21 U.S.C. 952, 953, 957, 958, and in accordance with 21 CFR part 1312 as of August 31, 2018.

10. Quota. Only DEA registered manufacturers may manufacture N-ethylpentylone in accordance with a quota assigned pursuant to 21 U.S.C. 826 and in accordance with 21 CFR part 1303 as of August 31, 2018.

11. Liability. Any activity involving N-ethylpentylone not authorized by, or in violation of the CSA, occurring as of August 31, 2018, is unlawful, and may subject the person to administrative, civil, and/or criminal sanctions.

Regulatory Matters

Section 201(h) of the CSA, 21 U.S.C. 811(h), provides for a temporary scheduling action where such action is necessary to avoid an imminent hazard to the public safety. As provided in this subsection, the Attorney General may, by order, schedule a substance in schedule I on a temporary basis. Such an order may not be issued before the expiration of 30 days from (1) the publication of a notice in the Federal Register of the intention to issue such order and the grounds upon which such order is to be issued, and (2) the date that notice of the proposed temporary scheduling order is transmitted to the Assistant Secretary of HHS. 21 U.S.C. 811(h)(1).

Inasmuch as section 201(h) of the CSA directs that temporary scheduling actions be issued by order and sets forth the procedures by which such orders are to be issued, the DEA believes that the notice and comment requirements of section 553 of the Administrative Procedure Act (APA), 5 U.S.C. 553, do not apply to this notice of intent. In the alternative, even assuming that this notice of intent might be subject to section 553 of the APA, the Acting Administrator finds that there is good cause to forgo the notice and comment requirements of section 553, as any further delays in the process for issuance of temporary scheduling orders would be impracticable and contrary to the public interest in view of the manifest urgency to avoid an imminent hazard to the public safety.

Further, the DEA believes that this temporary scheduling action is not a “rule” as defined by 5 U.S.C. 601(2), and, accordingly, is not subject to the requirements of the Regulatory Flexibility Act (RFA). The requirements for the preparation of an initial regulatory flexibility analysis in 5 U.S.C. 603(a) are not applicable where, as here, the DEA is not required by section 553 of the APA or any other law to publish a general notice of proposed rulemaking.

Additionally, this action is not a significant regulatory action as defined by Executive Order 12866 (Regulatory Planning and Review), section 3(f), and, accordingly, this action has not been reviewed by the Office of Management and Budget.

This action will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with Executive Order 13132 (Federalism) it is determined that this action does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment.

As noted above, this action is an order, not a rule. Accordingly, the Congressional Review Act (CRA) is inapplicable, as it applies only to rules. However, if this were a rule, pursuant to the CRA, “any rule for which an agency for good cause finds that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest, shall take effect at such time as the federal agency promulgating the rule determines.” 5 U.S.C. 808(2). It is in the public interest to schedule this substance immediately to avoid an imminent hazard to the public safety. This temporary scheduling action is taken pursuant to 21 U.S.C. 811(h), which is specifically designed to enable the DEA to act in an expeditious manner to avoid an imminent hazard to the public safety. 21 U.S.C. 811(h) exempts the temporary scheduling order from standard notice and comment rulemaking procedures to ensure that the process moves swiftly. For the same reasons that underlie 21 U.S.C. 811(h), that is, the DEA's need to move quickly to place this substance in schedule I because it poses an imminent hazard to the public safety, it would be contrary to the public interest to delay implementation of the temporary scheduling order. Therefore, this order shall take effect immediately upon its publication. The DEA has submitted a copy of this temporary order to both Houses of Congress and to the Comptroller General, although such filing is not required under the Small Business Regulatory Enforcement Fairness Act of 1996 (Congressional Review Act), 5 U.S.C. 801-808 because, as noted above, this action is an order, not a rule.

The Coast Guard has issued a temporary deviation from the operating schedule that governs the U.S. 70 (Alfred A. Cunningham) Bridge across the Trent River, mile 0.0, at New Bern, NC. The deviation is necessary to accommodate the 30th Annual Bike MS: Historic New Bern Ride. This deviation allows the bridge to remain in the closed-to-navigation position.

DATES:

This deviation is effective from 8:00 a.m. on September 8, 2018 to 9:30 a.m. on September 9, 2018.

ADDRESSES:

The docket for this deviation, [USCG-2018-0841], is available at http://www.regulations.gov. Type the docket number in the “SEARCH” box and click “SEARCH”. Click on Open Docket Folder on the line associated with this deviation.

The event director, Game On Inc., with approval from the North Carolina Department of Transportation, who owns and operates the U.S. 70 (Alfred A. Cunningham) Bridge across the Trent River, mile 0.0, at New Bern, NC, has requested a temporary deviation from the current operating regulations. This temporary deviation is necessary to accommodate participation by cyclists during the 30th Annual Bike MS: Historic New Bern Ride. The bridge is a double bascule bridge and has a vertical clearance in the closed position of 14 feet above mean high water.

The current operating schedule is set out in 33 CFR 117.843(a). Under this temporary deviation, the bridge will be maintained in the closed-to-navigation position from 8:00 a.m. to 9:30 a.m. on September 8th and September 9th 2018. The Trent River is used by a variety of vessels including small commercial vessels and recreational vessels. The Coast Guard has carefully coordinated the restrictions with waterway users in publishing this temporary deviation.

Vessels able to pass through the bridge in the closed position may do so at anytime. There is no immediate alternate route for vessels unable to pass through the bridge in the closed position but the bridge will be able to open for emergencies. The Coast Guard will also inform users of the waterways through our Local and Broadcast Notice to Mariners of the change in operating schedule for the bridge so that vessels can arrange their transits to minimize any impacts caused by this temporary deviation.

In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the effective period of this temporary deviation. This deviation from the operating regulations is authorized under 33 CFR 117.35.

The Coast Guard has issued a temporary deviation from the operating schedule that governs the US40-322 (Albany Avenue) Bridge across the New Jersey Intracoastal Waterway (NJICW) (Inside Thorofare), mile 70.0, at Atlantic City, NJ. The deviation is necessary to accommodate the free movement of pedestrians and vehicles during the 3rd Annual Iron Man. This deviation allows the bridge to remain in the closed-to-navigation position.

DATES:

The deviation is effective from 6 a.m. to 4 p.m. on September 23, 2018.

ADDRESSES:

The docket for this deviation [USCG-2018-0840], is available at http://www.regulations.gov. Type the docket number in the “SEARCH” box and click “SEARCH”. Click on Open Docket Folder on the line associated with this deviation.

The event director, DelMoSports, LLC, with approval from the New Jersey Department of Transportation, who owns and operates the US40-322 (Albany Avenue) Bridge across the NJICW (Inside Thorofare), mile 70.0, at Atlantic City, NJ, has requested a temporary deviation from the current operating regulations. This temporary deviation is necessary to accommodate the free movement of pedestrians and vehicles during the 3rd Annual Iron Man. The bridge is a double bascule bridge and has a vertical clearance in the closed position of 10 feet above mean high water.

The current operating schedule is set out in 33 CFR 117.733(f). Under this temporary deviation, the bridge will be maintained in the closed-to-navigation position from 6 a.m. to 4 p.m. on September 23, 2018. The NJICW (Inside Thorofare) is used by recreational vessels. The Coast Guard has carefully coordinated the restrictions with waterway users in publishing this temporary deviation.

Vessels able to pass through the bridge in the closed position may do so at anytime. The bridge will be able to open for emergencies and there is no immediate alternate route for vessels unable to pass through the bridge in the closed position. The Coast Guard will also inform the users of the waterway through our Local and Broadcast Notice to Mariners of the change in operating schedule for the bridge so that vessels can arrange their transits to minimize any impacts caused by the temporary deviation.

In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the effective period of this temporary deviation. This deviation from the operating regulations is authorized under 33 CFR 117.35.

The Coast Guard has issued a temporary deviation from the operating schedule that governs the Burlington Northern Santa Fe (BNSF) Railway Company swing span bridge across Charenton Canal, mile 0.4, at Baldwin, LA. The deviation is necessary to complete repairs, install a bridge deck, and change out a generator. This deviation allows the bridge to remain in the closed-to-navigation position for 48 hours.

DATES:

This deviation is effective from 10 p.m. on September 2, 2018 through 10 p.m. on September 4, 2018.

ADDRESSES:

The docket for this deviation, USCG-2018-0812 is available at http://www.regulations.gov. Type the docket number in the “SEARCH” box and click “SEARCH.” Click on Open Docket Folder on the line associated with this deviation.

Burlington Northern Santa Fe (BNSF), the owner and operator of the BNSF swing span bridge across Charenton Canal, mile 0.4, at Baldwin, LA, requested a temporary deviation from the swing span drawbridge operating schedule to complete repairs, install a bridge deck, and change out a generator. The bridge has a vertical clearance of 10 feet in the closed-to-navigation position. The current operating schedule is set out in 33 CFR 117.5. The bridge currently opens on signal for the passage of vessels.

This temporary deviation allows the bridge to remain closed-to-navigation position for a 48 hour period from 10 p.m. on September 2, 2018 through 10 p.m. on September 4, 2018. Navigation on the waterway consists mainly of tugs with tows, with some commercial fishing vessels and recreational craft. The bridge will be able to open for emergencies, however, an alternate route is available for mariners through the Berwick Locks. The alternate waterway route takes approximately 45 minutes to transit. The Coast Guard has carefully considered the restrictions with waterway users in publishing this temporary deviation. Due to prior experience, as well as coordination with waterway users, and the alternate route through Berwick Locks, this closure will not have a significant effect on these vessels. The Coast Guard will also inform the waterway users of the change in operating schedule for the bridge through our Local Notice and Broadcast Notices to Mariners so that vessel operators can arrange their transits to minimize any impact caused by this temporary deviation.

In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of each of this temporary deviation. This deviation from the operating regulations is authorized under 33 CFR 117.35.

The Coast Guard is establishing a temporary safety zone on waters of Indian River Bay off Long Neck, DE, from 7:30 p.m. through 8:30 p.m. on September 2, 2018, during the Labor Day Long Neck Style Fireworks Display. The safety zone is necessary to ensure the safety of participant vessels, spectators, and the boating public during the event. This regulation prohibits persons and non-participant vessels from entering, transiting through, anchoring in, or remaining within the safety zone unless authorized by the Captain of the Port (COTP) Delaware Bay or a designated representative.

DATES:

This rule is effective from 7:30 p.m. through 8:30 p.m. on September 2, 2018.

ADDRESSES:

To view documents mentioned in this preamble as being available in the docket, go to http://www.regulations.gov, type USCG-2018-0737 in the “SEARCH” box and click “SEARCH.” Click on Open Docket Folder on the line associated with this rule.

I. Table of AbbreviationsCFR—Code of Federal RegulationsCOTP—Captain of the PortDHS—Department of Homeland SecurityFR—Federal RegisterNPRM—Notice of proposed rulemaking§—SectionU.S.C.—United States CodeII. Background Information and Regulatory History

The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because it is impracticable and contrary to the public interest to do so. There is insufficient time to allow for a reasonable comment period prior to the date of the event. The rule must be in force by September 2, 2018, to serve its purpose of ensuring the safety of spectators and the general public from hazards associated with the fireworks display. Hazards include accidental discharge of fireworks, dangerous projectiles, and falling hot embers or other debris.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register. Delaying the effective date of this rule would be impracticable and contrary to the public interest because immediate action is needed to mitigate the potential safety hazards associated with a fireworks display in this location.

III. Legal Authority and Need for Rule

The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The Captain of the Port Delaware Bay (COTP) has determined that potential hazards associated with the fireworks display on September 2, 2018, will be a safety concern for anyone within a 100-yard radius of the fireworks barge, which will be anchored in approximate position 38°36′35.93″ N, 075°09′31.00″ NW. This rule is needed to protect persons, vessels and the public within the safety zone during the fireworks display.

IV. Discussion of the Rule

This rule establishes a temporary safety zone on the waters of Indian River Bay off Long Neck, NJ during a fireworks display from a barge. The event is scheduled to take place at 7:45 p.m. on September 2, 2018. The safety zone will extend 100 yards around the barge, which will be anchored at approximate position 38°36′35.93″ N, 075°09′31.00″ W. No person or vessel will be permitted to enter, transit through, anchor in, or remain within the safety zone without obtaining permission from the COTP Delaware Bay or a designated representative. If authorization to enter, transit through, anchor in, or remain within the safety zone is granted by the COTP Delaware Bay or a designated representative, all persons and vessels receiving such authorization must comply with the instructions of the COTP Delaware Bay or a designated representative. The Coast Guard will provide public notice of the safety zone by Broadcast Notice to Mariners, and by on-scene actual notice.

V. Regulatory Analyses

We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.

A. Regulatory Planning and Review

Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13771 directs agencies to control regulatory costs through a budgeting process. This rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, this rule has not been reviewed by the Office of Management and Budget (OMB), and pursuant to OMB guidance it is exempt from the requirements of Executive Order 13771.

The impact of this rule is not significant for the following reasons: (1) Although persons and vessels may not enter, transit through, anchor in, or remain within the safety zone without authorization from the COTP Delaware Bay or a designated representative, they may operate in the surrounding area during the enforcement period; (2) persons and vessels will still be able to enter, transit through, anchor in, or remain within the regulated area if authorized by the COTP Delaware Bay or a designated representative; and (3) the Coast Guard will provide advance notification of the safety zone to the local maritime community by Broadcast Notice to Mariners and by on-scene actual notice.

B. Impact on Small Entities

The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

C. Collection of Information

This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

D. Federalism and Indian Tribal Governments

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.

Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this rule has implications for federalism or Indian tribes, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section above.

E. Unfunded Mandates Reform Act

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

F. Environment

We have analyzed this rule under Department of Homeland Security Directive 023-01 and Commandant Instruction M16475.1D, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969(42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety zone that will prohibit persons and vessels from entering, transiting through, anchoring in, or remaining within a limited area on the navigable water in the Indian River Bay, during a fireworks display lasting approximately one hour. It is categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A Record of Environmental Consideration (REC) supporting this determination is available in the docket where indicated under ADDRESSES.

G. Protest Activities

The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the FOR FURTHER INFORMATION CONTACT section to coordinate protest activities so that your message can be received without jeopardizing the safety or security of people, places or vessels.

(a) Location. The following area is a safety zone: All navigable waters of the Indian River Bay near Long Neck, NJ, within 100 yards of the barge anchored at approximate position 38°36′35.93″ N, 075°09′31.00″ W. All coordinates are based on 1984 World Geodetic System.

(b) Definitions As used in this section, designated representative means a Coast Guard Patrol Commander, including a Coast Guard petty officer, warrant or commissioned officer on board a Coast Guard vessel or on board a federal, state, or local law enforcement vessel assisting the Captain of the Port (COTP), Delaware Bay in the enforcement of the safety zone.

(c) Regulations. (1) Under the general safety zone regulations in subpart C of this part, you may not enter the safety zone described in paragraph (a) of this section unless authorized by the COTP or the COTP's designated representative.

(2) To seek permission to enter or remain in the zone, contact the COTP or the COTP's representative via VHF-FM channel 16 or 215-271-4807. Those in the safety zone must comply with all lawful orders or directions given to them by the COTP or the COTP's designated representative.

(3) This section applies to all vessels except those engaged in law enforcement, aids to navigation servicing, and emergency response operations.

(d) Enforcement. The U.S. Coast Guard may be assisted in the patrol and enforcement of the safety zone by federal, state, and local agencies.

(e) Enforcement period. This zone will be enforced from 7:30 p.m. through 8:30 p.m. on September 2, 2018.

The Coast Guard will enforce the temporary safety zone for the 6th Annual Swim for Alligator Reef Lighthouse, Islamorada, Florida from 6:30 a.m. until 4:30 p.m. on September 15, 2018. Our regulation for Recurring Safety Zones in Captain of the Port Key West Zone identifies the regulated area for this event. This action is necessary to ensure the safety of event participants and spectators. During the enforcement period, no person or vessel may enter, transit through, anchor in, or remain within the regulated area without approval from the Captain of the Port Key West or a designated representative.

DATES:

The regulations in 33 CFR 165.786, Table to § 165.786, Line No. 9.1 will be enforced from 6:30 a.m. until 4:30 p.m. on September 15, 2018.

The Coast Guard will enforce the safety zones in 33 CFR 165.786, Table to § 165.786, Line No. 9.1, from 6:30 a.m. until 4:30 p.m. on September 15, 2018, for the annual Swim for Alligator Reef Lighthouse in Islamorada, Florida. Our regulation for Recurring Safety Zones in Captain of the Port Key West Zone, § 165.786, Line No. 9.1, specifies the location of the regulated area as all within 50 yards in front of the lead safety vessel preceding the first event participants, 50 yards behind the safety vessel trailing the last event participants, and at all times extend 100 yards on either side of the safety vessels.

This action prevents vessels from transiting areas specifically designated as safety zones during the periods of enforcement. During the enforcement period, no person or vessel may enter, transit through, anchor within, or remain within the established regulated areas without approval from the Captain of the Port Key West or designated representative. The Coast Guard may be assisted by other Federal, State, or local law enforcement agencies in enforcing this regulation.

The Coast Guard will provide notice of the regulated area by Local Notice to Mariners and Broadcast Notice to Mariners. If the Captain of the Port Key West determines that the regulated area need not be enforced for the full duration stated in this publication, he or she may use a Broadcast Notice to Mariners to grant general permission to enter the regulated area.

Office of Elementary and Secondary Education, Department of Education.

ACTION:

Correcting amendment.

SUMMARY:

On August 22, 2018, the Secretary published a final rule amending the Code of Federal Regulations (CFR) by removing outdated or superseded regulations, which are no longer needed for the reasons discussed in the rule. There was a clerical error in one of the amendments that prevented two CFR sections from being removed. This document corrects that error.

If you use a telecommunications device for the deaf (TDD) or a text telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:

The Department is correcting a clerical error in an amendment in FR Rule Doc. No. 2018-17480, which published on August 22, 2018, at 83 FR 42440. The rule removed outdated or superseded regulations in 34 CFR parts 200, 237, and 299. One of the amendments to part 200 intended to remove §§ 200.55 through 200.57. The heading to the amendment reflected that section span but its corresponding instruction (instruction 8) directed the removal of § 200.57 only. This document correctly removes §§ 200.55 and 200.56 as originally intended in the August 22, 2018, rule.

The Environmental Protection Agency (EPA) is approving a state implementation plan (SIP) revision submission from Maryland addressing the infrastructure requirements of section 110 of the Clean Air Act (CAA) for the 2012 annual fine particulate matter (PM2.5) National Ambient Air Quality Standard (NAAQS or standard). The infrastructure requirements are designed to ensure that the structural components of each state's air quality management program are adequate to meet the state's responsibilities under the CAA. EPA is approving Maryland's submittal addressing the infrastructure requirements for the 2012 PM2.5 NAAQS in accordance with the requirements of section 110 of the CAA.

DATES:

This final rule is effective on October 1, 2018.

ADDRESSES:

EPA has established a docket for this action under Docket ID Number EPA-R03-OAR-2017-0441. All documents in the docket are listed on the http://www.regulations.gov website. Although listed in the index, some information is not publicly available, e.g., confidential business information (CBI) or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the internet and will be publicly available only in hard copy form. Publicly available docket materials are available through http://www.regulations.gov, or please contact the person identified in the For Further Information Contact section for additional availability information.

FOR FURTHER INFORMATION CONTACT:

Sara Calcinore, (215) 814 2043, or by email at calcinore.sara@epa.gov.

SUPPLEMENTARY INFORMATION:I. Background

Particle pollution, also referred to as particulate matter (PM), is a complex mixture of small particles and liquid droplets suspended in the air, which causes adverse health effects and is the leading cause of visibility impairment in the United States. Particles with a diameter equal to or less than 2.5 microns, referred to as fine particulate matter or PM2.5, are either emitted directly into the atmosphere or are formed from the chemical reactions of precursor gases, such as sulfur dioxide (SO2), nitrogen oxides (NOX), certain volatile organic compounds (VOCs), and ammonia, in the atmosphere. SO2 and NOX are the primary precursors for the formation of PM2.5 and are emitted primarily from point sources as well as nonpoint, onroad, and nonroad sources.

On July 18, 1997, EPA promulgated a new 24-hour and a new annual NAAQS for PM2.5 (62 FR 38652). On October 17, 2006, EPA revised the NAAQS for PM2.5, tightening the 24-hour PM2.5 standard from 65 micrograms per cubic meter (µg/m3) to 35 µg/m3, and retaining the annual PM2.5 NAAQS at 15 µg/m3 (71 FR 61144). Subsequently, on December 14, 2012, EPA revised the level of the health based (primary) annual PM2.5 NAAQS to 12 µg/m3. See 78 FR 3086 (January 15, 2013).1

1 In EPA's 2012 PM2.5 NAAQS revision, EPA left unchanged the existing welfare (secondary) standards for PM2.5 to address particulate matter (PM) related effects such as visibility impairment, ecological effects, damage to materials, and climate impacts. This includes a secondary annual standard of 15 µg/m3 and a 24-hour standard of 35 µg/m3.

Pursuant to section 110(a)(1), states must submit “within 3 years (or such shorter period as the Administrator may prescribe) after the promulgation of a national primary ambient air quality standard (or any revision thereof),” a plan that provides for the “implementation, maintenance, and enforcement” of such NAAQS. The statute directly imposes on states the duty to make these SIP submissions and the requirements to make the submissions is not conditioned upon EPA's taking any action other than promulgating a new or revised NAAQS. Section 110(a)(2) includes a list of specific elements that “[e]ach such plan” submission must address. EPA commonly refers to such state plans as “infrastructure SIPs.”

II. Summary of SIP Revision and EPA Analysis

On August 18, 2016, the State of Maryland, through the Maryland Department of the Environment (MDE), formally submitted a SIP revision (SIP #16-12) in order to satisfy the requirements of section 110(a) of the CAA for the 2012 PM2.5 NAAQS. The SIP submittal addressed the following infrastructure elements for the 2012 PM2.5 NAAQS: CAA section 110(a)(2)(A), (B), (C), (D)(i)(I), (D)(i)(II), D(ii), (E), (F), (G), (H), (J), (K), (L), and (M).

Maryland's infrastructure SIP submittal did not address the following two elements of CAA section 110(a)(2): The portion of section 110(a)(2)(C) pertaining to permit programs, known as nonattainment new source review (NNSR), under part D of the CAA, and section 110(a)(2)(I), referred to as “element (I),” pertaining to the nonattainment requirements of part D, title I of the CAA. According to the EPA guidance issued on September 13, 2013 (2013 Infrastructure Guidance),2 the NNSR permitting program requirement of section 110(a)(2)(C) is to be addressed in a different SIP, and therefore does not need to be addressed in this SIP revision. Section 110(a)(2)(I) is not required to be submitted by the 3-year submission deadline of CAA section 110(a)(1) and will be addressed in a separate process if necessary.

On July 5, 2018 (83 FR 31352), EPA published a notice of proposed rulemaking (NPR) for Maryland. In the NPR, EPA proposed approval of Maryland's August 18, 2016 infrastructure SIP submittal for the 2012 PM2.5 NAAQS. A detailed summary of EPA's review and rationale for approving Maryland's submittal may be found in the Technical Support Document (TSD) for this rulemaking action, which is available online at www.regulations.gov, Docket ID Number EPA-R03-OAR-2017-0441.

III. Public Comments and EPA Response

EPA received a total of three comments on the July 5, 2018 NPR. Two of the comments did not concern any of the specific issues raised in the NPR, nor did they address EPA's rationale for the proposed approval of MDE's submittal. Therefore, EPA is not responding to those comments. EPA also received a comment that was supportive of EPA's proposed approval of Maryland's August 18, 2016 infrastructure SIP submittal for the 2012 PM2.5 NAAQS. All of the comments received are included in the docket for this action, available online at www.regulations.gov, Docket ID: EPA-R03-OAR-2017-0441.

IV. Final Action

EPA's review of Maryland's August 18, 2016 infrastructure SIP submittal for the 2012 PM2.5 NAAQS indicates that MDE's August 18, 2016 submittal satisfies the infrastructure requirements of CAA section 110(a) for the 2012 PM2.5 NAAQS.3 EPA is approving Maryland's August 18, 2016 infrastructure SIP submittal for the 2012 PM2.5 NAAQS as a revision to the Maryland SIP.

3 As stated above, Maryland's infrastructure SIP submittal did not address the portion of CAA section 110(a)(2)(C) pertaining to the NNSR permitting program nor CAA section 110(a)(2)(I) pertaining to the nonattainment requirements of part D, title I of the CAA. According to the 2013 Infrastructure Guidance, the NNSR permitting program requirement of section 110(a)(2)(C) is to be addressed in a different SIP and therefore does not need to be addressed in this SIP revision. Section 110(a)(2)(I) is not required to be submitted by the 3-year submission deadline of CAA section 110(a)(1) and will be addressed in a separate process if necessary.

V. Statutory and Executive Order ReviewsA. General Requirements

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the CAA and applicable federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves state law as meeting federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:

• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);

• Is not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because

SIP approvals are exempted under Executive Order 12866.

• does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);

• is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.);

• does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);

• does not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and

• does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, this rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.

B. Submission to Congress and the Comptroller General

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this action and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. A major rule cannot take effect until 60 days after it is published in the Federal Register. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

C. Petitions for Judicial Review

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by October 30, 2018. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action approving Maryland's August 18, 2016 infrastructure SIP submittal for the 2012 PM2.5 NAAQS may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

PART 52—APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS1. The authority citation for part 52 continues to read as follows:Authority:

42 U.S.C. 7401 et seq.

Subpart V—Maryland2. In § 52.1070, the table in paragraph (e) is amended by adding an entry for “Section 110(a)(2) Infrastructure Requirements for the 2012 PM2.5 NAAQS” at the end of the table to read as follows:§ 52.1070 Identification of plan.

The Environmental Protection Agency (EPA) is approving certain changes to the Michigan State Implementation Plan (SIP). This action relates to changes to the Permit To Install (PTI) requirements of Part 2 of the Michigan Administrative Code (Part 2 Rules). Changes to the Part 2 Rules were submitted on November 12, 1993; May 16, 1996; April 3, 1998; September 2, 2003; March 24, 2009; and February 28, 2017.

DATES:

This final rule is effective on October 1, 2018.

ADDRESSES:

EPA has established a docket for this action under Docket ID No. EPA-R05-OAR-2007-1092. All documents in the docket are listed on the www.regulations.gov website. Although listed in the index, some information is not publicly available, i.e., Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the internet and will be publicly available only in hard copy form. Publicly available docket materials are available either through www.regulations.gov or at the Environmental Protection Agency, Region 5, Air and Radiation Division, 77 West Jackson Boulevard, Chicago, Illinois 60604. This facility is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding Federal holidays. We recommend that you telephone Rachel Rineheart, Environmental Engineer, at (312) 886-7017 before visiting the Region 5 office.

Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA. This supplementary information section is arranged as follows:

I. What is the background of these SIP submissions?II. What is our response to comments received on the proposed rulemaking?III. What action is EPA taking?IV. Incorporation by Reference.V. Statutory and Executive Order Reviews.I. What is the background of these SIP submissions?A. What state submissions does this rulemaking address?

The State of Michigan's minor source PTI rules are contained in Part 2 of the Michigan Administrative Code. EPA last approved changes to the Part 2 rules in 1982. The Michigan Department of Environmental Quality (MDEQ) has submitted several Part 2 revision packages since that time; however, EPA has not taken a final action on any of the submittals. The following table provides a summary of the various state submittals with the most recent version of each section of the Michigan Rule highlighted in bold.

EPA published a proposed approval of all changes, except the public notice procedures in Michigan R. 336.1205, on August 15, 2017 (82 FR 38651), with a 30-day public comment period. EPA reopened the comment period twice due to missing files in the docket on regulations.gov. The comment period was reopened for an additional 30 days on November 2, 2017 (82 FR 50853), and an additional 15 days on January 9, 2018 (83 FR 1003). EPA is taking no action on Michigan R. 336.1205 at this time.

B. Why did the state make these SIP submissions?

Section 110(a)(2)(C) of Clean Air Act (the Act) requires that each SIP include a program to provide for the regulation of construction and modification of stationary sources as necessary to assure that the National Ambient Air Quality Standards (NAAQS) are achieved. Specific elements for an approvable construction permitting plan are found in the implementing regulations at 40 CFR part 51, subpart I—Review of New Sources and Modifications. Requirements relevant to minor construction programs are 40 CFR 51.160-51.164. EPA regulations have few specific criteria for state minor new source review (NSR) programs. Generally, state programs must set forth legally enforceable procedures that allow the state to prevent any planned construction activity that would result in a violation of the state's SIP or a national standard.

The revisions to Part 2 submitted by MDEQ are largely provisions that strengthen the already approved minor NSR program adding greater detail with respect to applicability, required application material, and processing of applications; however, the revisions do include changes to waiver provisions and the addition of several categories of exemptions from the requirement to obtain a PTI.

II. What is our response to comments received on the proposed rulemaking?

EPA received several comments during the public comment process. EPA received four anonymous comments that were unrelated to the action, and we will not be addressing those comments. EPA received adverse comment on the proposed approval from the Sierra Club, the Great Lakes Environmental Law Center, the Center for Biological Diversity, and the Environmental Law & Policy Center. EPA received a letter from the Environmental Law & Policy Center dated September 14, 2017, and a letter from the Sierra Club, Great Lakes Environmental Law Center, and the Center for Biological Diversity dated September 14, 2017, during the original public comment period. Sierra Club and the Great Lakes Environmental Law Center provided additional comment during the first reopening in a letter dated December 4, 2017. Sierra Club, the Great Lakes Environmental Law Center, and the Center for Biological Diversity provided additional comments during the second reopening in a letter dated January 24, 2018. A summary of the comments received and EPA's response follow.

A. Michigan R. 336.1201a General PTIs

Michigan R. 336.1201a gives the MDEQ the ability to create general PTIs. A general permit is a permit document that contains standardized requirements that multiple stationary sources can use. It may cover categories of emission units or stationary sources that are similar in nature. The purpose of a general permit is to ensure the protection of air quality while simplifying the permit process for similar minor sources. General permits allow the permitting authority to notify the public through one notice that it intends to apply those requirements to any eligible source that seeks coverage under the permit in the future. This minimizes the burden on the reviewing authority's resources by eliminating the need to issue separate permits for each individual minor source within the source type or category covered by the general permit. Use of a general permit also decreases the time required for an individual minor source to obtain a preconstruction permit because the application process is standardized.

Michigan R. 336.1201a allows MDEQ to issue general PTIs for categories of similar emission units or stationary sources. The rule requires the general permits to contain limitations as necessary to assure compliance with applicable requirements, and that limitations on potential to emit be enforceable as a practical matter. The general permits must also identify the criteria by which a stationary source or emission unit may qualify for the permit. Finally, the rule requires MDEQ to provide for public notice of the general permit.

Comment 1: While EPA's Title V permitting rules provide for issuance of general operating permits, the concept of a general construction permit is not consistent with the requirements of Section 110(a)(2)(C) of the Act or 40 CFR 51.160-51.164.

EPA Response: EPA disagrees that the lack of a specific allowance for general permits under the permit program requirements of section 110(a)(2)(C) of the Act precludes the use of general permits for construction as there is no provision that specifically disallows them. In fact, the language in the Act concerning non-major activities simply requires “regulation of the modification and construction of any stationary source within the areas covered by the plan as necessary to assure that national ambient air quality standards are achieved.” The Act and the implementing regulations at 40 CFR 51.160 are structured to allow the implementing authority flexibility in designing a minor source program that meets the authority's individual needs while assuring protection of ambient air. EPA has a well-established, longstanding position that the use of general permits for construction of minor sources is appropriate under the Act. The January 25, 1995, memorandum “Options for Limiting Potential to Emit (PTE) of a Stationary Source Under Section 112 and Title V of the Clean Air Act,” the January 25, 1995 memorandum, “Guidance an Enforceability Requirements for Limiting Potential to Emit through SIP and § 112 Rules,” and the April 14, 1998, memorandum, “Potential to Emit (PTE) Guidance for Specific Source Categories,” all endorse the use of a general permit program approved into the SIP pursuant to section 110(a)(2)(C) of the Act as a means of effectively establishing limitations on the potential to emit of stationary sources. EPA allows for the issuance of general permits to minor sources under its own Federal Minor NSR Program in Indian Country at 40 CFR 49.156.

Comment 2: The Michigan Rules do not define “similar stationary sources or emissions units.” There is no requirement in the rules that, to be similar, source or emission units must have similar emissions and stack parameters. Sources with different stack parameters and emission rates, even though similar sources, could have significantly different impact on air pollutant concentrations. Furthermore, no definition of “similar source” can adequately address neighboring sources of air pollution which may cause ambient pollution concentrations at or near the levels of a NAAQS.

EPA Response: We disagree that there is a need to define “similar stationary sources or emissions units” in this rule. The identified terms have their common meaning in the context of the rule. In the case of general permits, defining the scope of the stationary source and/or emissions units covered by a particular general permit should be done when establishing the terms of the general permit. All interested parties will have the opportunity to provide input on the appropriateness of the scope of a particular general permit during the public comment period for that permit. The appropriate time to comment is during the public comment period for a particular general permit.

Comment 3: A general permit would not ensure that a specific new or modified source would be prohibited from construction if it would interfere with attainment or maintenance of the NAAQS or interfere with the control strategy. The impact of a source's emissions on air pollutant concentrations is dependent on a myriad of factors including topography, other buildings in the vicinity, background pollutant concentrations, and neighboring sources of pollution as well as stack and plume characteristics.

EPA Response: We disagree. Michigan R. 336.1207, which requires MDEQ to deny an application that would interfere with the attainment or maintenance of a NAAQS, would apply to any general permit issued by MDEQ. There is still an application process for any source wanting coverage under a general permit, and MDEQ does have the authority to deny coverage under a general permit to any applicant. The potential air quality impacts of a general permit should be considered during the development of each general permit. Concerns regarding the adequacy of permit terms or application requirements concerning potential impacts on air quality are more appropriately raised during the public comment period for each general permit developed by MDEQ.

Comment 4: The concept of a general construction (or operating) permit is that one permit can be issued for a source type, and similar sources can request and be granted approval to construct and/or operate under that permit without having to apply for a new construction permit, thereby avoiding all of the requirements that are part of the application process including public notice and opportunity for comment.

EPA Response: A source must apply for coverage under a general permit, and each general permit must be made available for public comment. EPA does not agree that the general permitting process would allow a source to avoid any requirements of the application process. As noted above, EPA has a well-established position in support of general permits for construction and has determined that the notice and comment required in the establishment of each general permit meets the public notice requirements of 40 CFR 51.161.

B. Michigan R. 336.1202 Waivers of Approval

Michigan R. 336.1202 provides the MDEQ with the authority to grant a waiver from the requirement to obtain a permit prior to commencing construction in certain limited circumstances. The PSD provisions of the Act prohibit commencement of construction without first obtaining the required permit authorizing construction; however, the requirement only applies to major sources, and no such restriction is specified under the minor NSR program requirements set forth in 40 CFR 51.160. In addition, EPA has made determinations which further support that limited construction may begin before a permit is issued for minor sources. For example, EPA's October 10, 1978, memorandum from Edward E. Reich to Thomas W. Devine in Region 1 discusses limited preconstruction activities allowed at a site with both PSD and non-PSD sources. This memo states that construction may begin on PSD-exempt projects before the permit is issued. EPA has established its position that limited waivers are acceptable for true minor sources in previous rulemaking. (See 68 FR 2217 and 73 FR 12893.) As stated previously, the minor NSR provisions at 40 CFR 51.160 require state programs to determine if activities would violate an applicable SIP or national standard and to prevent construction of an activity that would violate an applicable SIP provision or national standard. Michigan R 336.1202(1) requires an application for a waiver be submitted to MDEQ and requires MDEQ to act on the request within 30 days. Construction may not proceed unless the waiver is granted. The rule also indicates that the waiver does not guarantee approval of the required PTI and any construction activity would be at the owner/operator's risk. Michigan R. 336.1202(2) limits the waiver to minor construction activities (i.e., activities not subject to prevention of significant deterioration or nonattainment new source review requirements), activities that are not considered construction or reconstruction under a National Emission Standard for Hazardous Air Pollutants of 40 CFR part 63, and activities that are not considered construction or modification under a New Source Performance Standard of 40 CFR part 61. It is also important to note that the approved Part 2 rules currently included in the Michigan SIP already have an approved waiver provision. The currently approved waiver provision is much broader in scope, and the changes that EPA is approving here narrow that scope bringing the MDEQ provisions in line with other state programs.

Comment 1: The commenters object to EPA's approval of waiver provisions in general and argue that all of EPA's arguments for approval of waiver provisions are flawed and do not in any way justify approval.

EPA Response: EPA has outlined its position on waivers for minor source construction in previous rulemakings, as noted above, and will not be revisiting this established policy in this rulemaking. EPA finds that Michigan R. 336.1202 meets the criteria for approval outlined in those rulemakings. Michigan's rule requires application for a waiver and requires MDEQ to act upon the application for a waiver within 30 days. The waiver provision is limited to non-major construction activities and the applicant must show a delay in construction would result in hardship. Finally, the rule makes it clear that the source may not operate until such time a final permit is issued and that granting a waiver does not obligate MDEQ to issue a final permit.

Comment 2: Michigan R. 336.1202 conflicts with EPA regulations governing minor source review because it would allow a source to circumvent the public participation requirements until after a source or modification is constructed.

EPA Response: EPA's position on limited waiver provisions in minor NSR programs has already been established. As discussed above nothing in 40 CFR 51.161 requires that the required public notice occur prior to the commencement of construction activities for minor sources. MDEQ must still adhere to the SIP approved public notice requirements when issuing a permit.

Comment 3: The Michigan waiver provision conflicts with EPA's regulations governing major source review because it could apply to modified major sources that would otherwise be subject to PSD or nonattainment NSR. Although the Michigan waiver provision states that it does not apply to “any activity” that is subject to major source permitting requirements, the definition of “activity” under this rule is not consistent with the EPA's aggregation policy. By defining “activity” as the “concurrent and related installation, construction, relocation, or modification of any process or process equipment,” MDEQ's definition is inconsistent with the much broader policy that EPA has laid out in several policy memos in deciding when projects should be aggregated. Importantly, EPA policy does not require that projects be concurrently constructed to justify two or more projects being related. There are also numerous other factors to take into account to determine if two or more projects are related.

EPA Response: Neither the Act nor current EPA rules specifically addresses the basis upon which to aggregate changes for applicability purposes. Instead, EPA has developed its aggregation policy through statutory and regulatory interpretation and applicability determinations. Current EPA policy is generally guided by our analysis in memos such as the June 17, 1993 “Applicability of New Source Review Circumvention Guidance to 3M-Maplewood, Minnesota.” In this memo, EPA outlines criteria that a permitting authority might consider in determining which activities should be aggregated. The guidance suggests that a permitting authority should consider the timing of projects, whether or not changes are technically related or dependent upon one another, and any economic relationship between activities. EPA policy directs permitting authorities to evaluate the timing and relatedness of activities for aggregation. Since MDEQ has not defined either “concurrent” or “related”, we believe the language can be interpreted broadly enough to be consistent with EPA policy. Furthermore, the definition of activity here has no bearing on the definition of project under the state's PSD and major non-attainment NSR program. Applicability for PSD is defined in Michigan's Part 18 rules and applicability for major non-attainment NSR is defined in Michigan's Part 19 rules, and is independent of any applicability criteria established in Part 2. If an activity is subject to the Part 18 or Part 19 requirements either by itself or as part of a larger project, it would be excluded from use of the waiver provisions.

Comment 4: The waiver provision also conflicts with EPA regulations governing new major source review because it could apply to a source that ultimately requests limits on emissions to avoid major source or major modification permitting requirements.

EPA Response: EPA disagrees with the commenter's conclusions. The rule prohibits use of the waiver by sources subject to the state's major construction permitting programs. Any source that intends to take synthetic minor restrictions to avoid major source permitting requirements is major until a permit with enforceable restrictions is issued, and would be disqualified from the use of the waiver. MDEQ has made their position on this issue clear as well. In a public hearing report dated February 20, 2003, which is included in attachment F of the September 2003 submittal, MDEQ outlines how their rules would prevent the use of restrictions that are not part of an enforceable permit or order, thus limiting the waiver to true minors.

Comment 5: The Michigan waiver provision does not meet the requirements of the Act or 40 CFR 51.160(a) because it does not require the source to submit its plans and specifications for approval before MDEQ must act on a request for a waiver. Michigan R. 336.1202 indicates that a source's “pertinent plans and specifications” can be submitted after a waiver is granted and such plans are only required “as soon as is reasonably practical.” Furthermore, MDEQ's rule is not comparable to previously approved waiver provisions in Idaho and Wisconsin because both programs require a complete application for construction with an application for a waiver.

EPA Response: While the approvals in Idaho and Wisconsin note the submittal of a complete application for construction as additional safeguards, EPA disagrees that the submittal of a complete application for construction was established as a criterion for approval. Michigan R. 336.1202 does require application to MDEQ for a waiver. EPA does not agree that a complete application for construction is necessary, and the commenter has not provided evidence that MDEQ does not require adequate information with the waiver application. A check of MDEQ policy does in fact show that a complete application is required with an application for a waiver. Section 9-2 of MDEQ's “Permit to Install Workbook” states that a PTI application must be submitted “before, or with, a construction waiver request.”

Comment 6: Michigan R. 336.1202 conflicts with the Act and EPA regulations governing minor source review because it essentially amounts to a director's discretion provision to provide new exemptions from the substantive requirements of the permit to install requirements. That is because the source does not have to submit relevant information about the new or modified source to determine if it would interfere with the control strategy or cause or contribute to a NAAQS violation until after construction has begun, the new or modified source's proposed location and impact on air quality would not have to be disclosed to the public until after construction has begun, and if the source was planning on requesting enforceable emission limitations to avoid major source permitting requirements, no review by the MDEQ, the public, or EPA would be done until after construction has begun.

EPA Response: As discussed above, a complete application for a PTI is required with an application for a waiver. Because any source seeking synthetic minor or netting limitations is considered major until such time as a permit with practically enforceable limitations is issued, the rule would only allow a waiver for true minor actions. Finally, the rule prohibits operation until a final permit is issued, and that permit must meet the public notice procedures of the approved SIP.

C. Michigan R. 336.1209 Use of Old Permits To Limit Potential to Emit

Michigan R. 336.1209 allows a source to rely on a permit to install or a permit to operate issued by MDEQ before May 6, 1980 (prior to approval in the SIP), or issued by Wayne county before a delegation of authority to Wayne county pursuant to state statute for the purposes of applicability to Michigan R. 336.1210. Michigan R. 336.1210 is the state's Title V operating permit program.

Comment 1: This rule could allow a source to avoid the state's Title V requirements by relying on emission limits in permits that the state or Wayne County no longer have the ability to enforce due to the permit being based on rules that are extremely out of date or no longer on the books.

EPA Response: Changes to rules do not invalidate permits already issued. If the permits issued were non-expiring, they are still legally binding regardless of changes to the state's permitting rules. EPA sees this provision as reaffirming the state's authority to enforce these permits.

Comment 2: The provisions of Michigan Rule 336.1209 that allow sources to rely on pre-1980 permits and permit limits may result in permits that are inconsistent with EPA's criteria for “practically enforceable” limits. Those criteria include the requirement that the permit expressing the emission limits must identify the methods for determining compliance with the limit and require monitoring, recordkeeping and reporting. The commenter notes that neither Michigan R. 336.1209 or Michigan R. 336.1205(1)(a) specifically require that the permit to be used to avoid Title V requirements include these compliance assurance requirements.

EPA Response: Michigan R. 336.1209 requires that the permit contain production and/or operational limits consistent with the requirements of Michigan R. 336.1205(1)(a). Michigan R. 336.1205(1)(a) requires that limits be enforceable as a practical matter. While Michigan R. 336.1205(1)(a) does provide some detail regarding the types of limits that could be used and the timeframes for the limits, EPA does not see the language in this rule as defining “enforceable as a practical matter” and sees nothing in the language that would be inconsistent with EPA policy on what makes a limit enforceable as a practical matter. Furthermore, the commenter has not described how avoiding an operating permit requirement would impact the state's preconstruction permitting program.

Comment 3: EPA has established certain criteria that need to be met in order to establish enforceable limits on potential to emit, which include among other things EPA and public notice and the opportunity to comment on a potential to emit limit. (See 1/25/95 EPA Memo with Subject “Options for Limiting Potential to Emit (PTE) of a Stationary Source Under Section 112 and Title V of the Clean Air Act (Act)” at 3-4.)

EPA Response: The reference cited by the commenters is a discussion regarding the criteria for SIP approval of a federally enforceable state operating permit program (FESOP). As noted in the referenced memo, a criterion for approval of a FESOP program is that permits “be issued in a process that provides for review and an opportunity for comment by the public and by EPA.” Michigan R. 336.1209 is not a FESOP program, and the criteria for FESOP approval is not an appropriate measure for this rule.

Comment 4: To a large extent, EPA's criteria for creating practically enforceable emission limits to avoid major source permitting was developed pursuant to the 1987 Court decision United States v. Louisiana Pacific, 682 F. Supp. 112(D. Colo. 1987), 682 F. Supp. 1141 (D. Colo. 1988). By allowing Michigan sources to rely on permits issued well before this Court decision and before May 6, 1980, it seems highly doubtful that the Michigan or Wayne County permits upon which a source might rely to avoid Title V permitting meet EPA's more recent criteria for creating practically enforceable limits on potential to emit. Until it is clear that EPA has undertaken a review of these older programs and verified as such, as well as verified that the state or Wayne County still has authority to enforce such permits, EPA must not approve Michigan R. 336.1209 as part of the Michigan SIP.

EPA Response: The commenter seems to suggest that any limit predating the United States v. Louisiana Pacific decision and EPA's subsequent guidance could not be enforceable as a practical matter. Minor permit programs had been a part of state SIPs for nearly a decade before the decision and EPA's subsequent guidance. The fact that the EPA and the court found the Louisiana Pacific permit deficient is not evidence that all prior permits were somehow deficient. The rule requires that the old permit contain limits that are enforceable as a practical matter and that the permittee continue to maintain records, conduct monitoring, and submit reports to show that the source is in compliance with those terms.

Michigan R. 336.1278 and 336.1278a work together to define the scope of the permit exemptions in Michigan R. 336.1280 through 336.1290 and to ensure that sources choosing to forgo a case-by-case permitting decision collect and maintain data necessary to demonstrate that any construction related activities qualified for the exemptions. Michigan R. 336.1278 excludes major activities subject to either the PSD or major non-attainment programs from using the exemptions. This rule also affirms that the exemptions only apply to the requirement to obtain a construction permit and that all other applicable requirements including existing permit limitations must be met. Michigan R. 336.1278a requires sources using an exemption to maintain records that demonstrate the applicability of the exemption including information such as a description of equipment installed, date of installation, identification of the specific exemption being applied and an analysis that the exemption exclusions in Michigan R. 336.1278 do not apply.

Comment 1: Michigan's PTI regulations are an umbrella permit program that apply to new major sources and major modifications as well as minor sources and modifications. Many of the PTI exemptions, particularly the broadly-worded exemptions in Michigan R. 336.1285, could allow otherwise major modifications to escape review, despite the limitations in Michigan R. 336.1278 and 336.1278a. Thus, EPA is not justified in relying on Michigan R. 336.1278 and R. 336.1278a for assurance that all of the PTI exemptions in Michigan R. 336.1280 through Michigan R. 336.1290 will not allow a project to escape major source permitting.

EPA Response: EPA agrees with the commenter that the provisions in Part 2 apply to both minor sources and major modifications. EPA disagrees that the PTI regulations exemption would allow major modifications to escape review. The commenter is correct to a certain extent that the provisions in Part 2 apply to both major and minor construction activities. For example, the Part 2 rules do address the general requirement to obtain a permit, public notice procedures, and grounds for permit denial of all construction permit programs. However, the Part 2 rules do not define the applicability criteria for the state's PSD and major non-attainment NSR programs. The state's PSD rules in Part 18 and major non-attainment NSR rules in Part 19 define the specific requirements, including applicability, of those major source construction permitting programs. Michigan R. 336.1278 prohibits the use of the exemptions if the activity would be subject to PSD or major non-attainment permitting requirements. The applicability procedures in Part 18 and Part 19 are independently applicable, and nothing in Part 2 of the Michigan Rules would alter them; therefore, EPA finds that the exclusion in Michigan R. 336.1278 is adequate.

Comment 2: The specific provisions of Michigan R. 336.1278 fail to ensure that projects that should be required to obtain a PSD or major non-attainment permit will not be exempt from a PTI pursuant to the exemptions in Michigan R. 336.1280 through R. 336.1290 because Michigan R. 336.1278(1) does not use the same terms that are used in the PSD or non-attainment NSR regulations for identifying what changes may trigger NSR review. Specifically, the PSD and nonattainment NSR rules use the term “project” which is defined as “a physical change or change in the method of operation of an existing major stationary source” and Michigan R. 336.1278 uses the term “activity.” Michigan R. 336.1278(1)(b) defines “activity” as “the concurrent and related installation, construction, reconstruction, relocation, or modification of any process or process equipment.” It does not appear that this definition encompasses changes in the method of operation of any process or process equipment. The commenter also asserts that the definition of “activity” is inconsistent with EPA's aggregation policy because EPA policy does not require that changes be concurrent.

EPA Response: The MDEQ definition of “activity” includes “modification of any process or process equipment.” MDEQ defines “modify” in Michigan R. 336.1113(e). The definition of “modify” includes physical changes in, or changes in the method of operation of an existing process or process equipment. MDEQ has not excluded changes in the method of operation as suggested by the commenter. The commenter made a similar comment with respect to aggregation in their comments on the waiver provision at Michigan R. 336.1202. See EPA's response to Comment 3 in Section II.B of this action.

Comment 3: While Michigan R. 336.1278a(1)(c) does require an analysis demonstrating that Michigan R. 336.1278 does not apply to the process or process equipment, the rule does not clearly require such analysis for modification to process equipment.

EPA Response: EPA disagrees with this comment. It is clear that the “exempt process or exempt process equipment” in Michigan R. 336.1278a is referencing the exempt activity as defined by each of the categories of exemptions in Michigan R. 336.1280 through 336.1290. If the exempt process or exempt process equipment as defined by a specific exemption would include modifications to existing equipment, the facility applying the exemption would be required to maintain an analysis that the exemption applies to the modification of equipment.

Comment 4: Michigan R. 336.1278a(1)(c) does not specify how the analysis that Michigan R. 336.1278 does not apply should be done. Given that the language and terms of Michigan R. 336.1278(1) are not consistent with the terms and applicability procedures of the major NSR rules, it is imperative that the recordkeeping rule at Michigan R. 336.1278a(1)(c) specify the applicability procedures in the major PSD and non-attainment NSR rules. Given the complex procedures, how they differ for new emissions units versus existing emissions units, and the fact that Michigan R. 336.1278(1) uses different terminology than the major source permitting rules, this is a major omission.

EPA Response: As explained previously, nothing in the Part 2 rules impacts applicability under the state's major source permitting rules in Part 18 and Part 19. EPA believes that the expectation of Michigan R. 336.1278a(1)(c) is clear in that it requires a source applying any of the exemptions to maintain an analysis and records that support that (1) the project was not major pursuant to the requirements of the approved Part 18 or Part 19 programs, and (2) that the process or process equipment in question, meets the applicability criteria of whichever specific exemption they are claiming as defined by that exemption. Michigan very clearly states this in their May 15, 2012, letter from Dan Wyant to Susan Hedman. In its explanation of how these rules work to limit the scope of the exemptions, MDEQ states “A source must, therefore, first determine if it is excluded from exemption under Rule 278 before evaluating whether it is eligible for one of the specific exemptions in Rules 280 through 290.” In other words, major source permitting applicability must be determined before consideration of the Part 2 exemptions.

Comment 5: Michigan R. 336.1278a does not clearly require an analysis demonstrating that the specific exemption being used applies to the activity. Michigan R. 336.1278a must require an analysis demonstrating the applicability of an exemption, not just a description of the exempt process and an identification of the exemption being applied as suggested by Michigan R. 336.1278a(1)(a) and (b).

EPA Response: Michigan R. 336.1278a(1) states “To be eligible for a specific exemption listed in R 336.1280 to R 336.1291, any owner or operator of an exempt process or exempt process equipment must be able to provide information demonstrating the applicability of the exemption.” The language in Michigan R. 336.1278a(1)(a) and (b) are examples of what that information might be and not an all-inclusive list of required information. EPA believes that the intent of the rule is clear in that a source opting to use an exemption must keep any data required to demonstrate applicability of an exemption. The specifics of the necessary data are determined by each exempt category. If the exemption is based on size or capacity of a unit, the source must keep data on the size of the emission unit. If the exemption is based on the type of activity and associated emissions, the source would need to maintain records describing the exact nature of the change and an analysis of the resulting change in emissions. EPA does not agree that further clarification in Michigan R. 336.1278a is necessary.

Comment 6: The recordkeeping requirements of Michigan R. 336.1278a are not sufficient to ensure that activities will not escape major NSR permitting and are not adequate to ensure lawful implementation of all the permit exemptions. The rule does not clearly require the preparation of a demonstration at the time of the exemption. The rule does not clearly require that any demonstration be prepared and retained, instead it appears that it could be prepared once MDEQ requests it. Finally, the commenter objects to the rule only requiring submittal of records upon request by MDEQ arguing that the state will not be able to ensure proper implementation without upfront approval of the use of the exemptions by the state.

EPA Response: The fact that the Michigan R. 336.1278a(2) has set a deadline for responding to a written request by the state does not equate to a requirement for no records until such time as the state asks. The first requirement of every exemption is “This rule does not apply if prohibited by R 336.1278 and unless the requirements of R 336.1278a have been met.” Because Michigan R. 336.1278a(1) requires that “to be eligible” for an exemption, the owner/operator of a source must be able to provide the information in Michigan R. 336.1278a(1) and each individual exemption requires that those rules have been met, the clear intent is that the information demonstrating the applicability of the exemption be developed before the change and records kept immediately upon implementation. Finally, the commenter seems to suggest that only a requirement for upfront permitting authority approval is enforceable. 40 CFR 51.160(e) requires the state's procedures to “identify types and sizes of facilities, buildings, structures, or installations which will be subject to review.” The application requirements of 40 CFR 51.160(c) only apply to those activities subject to review. If the state had established blanket tonnage thresholds, we would not expect that projects under those thresholds would require a notice to the permitting authority and that the permitting authority would affirm that those projects are below the threshold. MDEQ has defined the types and sizes of facilities subject to review—any construction activity not listed in the categories of exemptions. Nothing in the Act or 40 CFR 51.160 would require notice or application from a source not subject to review. With respect to enforceability, like tonnage thresholds, the exemptions are enforced through periodic inspection of facilities.

1. General comments on Michigan PTI exemptions and MDEQ and EPA analysis of exemptions

Comment 1: In the November 9, 1999, proposed disapproval, EPA stated the state “must demonstrate why these sources need not be subject to review in accordance with Alabama Power de minimis or administrative necessity criteria.” EPA indicated such a demonstration would likely include “(1) an analysis of the types and quantities of emissions from exempted sources, and (2) an analysis which shows that exempting such facilities from permitting review will not interfere with maintenance of the NAAQS or applicable control strategy, and otherwise fulfills the purposes of the minor NSR regulations.” With respect to assuring that this SIP relaxation won't interfere with attainment or maintenance of the NAAQS or otherwise fulfill the requirements for minor new source review, EPA is relying on MDEQ's submittals from 2003 and 2017 to show that the SIP revision won't interfere with attainment or maintenance of the NAAQS. In those submittals, MDEQ provided example emission estimates for a select set of exemptions but not for all of the exemptions in Michigan R. 336.1280-336.1290.

EPA Response: In our review of the 2003 and 2017 submittals, EPA did not find any new exemption that was not sufficiently addressed by MDEQ to demonstrate non-interference. The commenters have not provided any specific examples. We think it is also important to note that in 1999 EPA did not conclude that any of the new exemptions were in fact a relaxation of the existing SIP in the proposed disapproval. EPA's finding was that MDEQ had failed to provide the required analysis addressing the effect of the changes on the current SIP.

Comment 2: MDEQ did not document the basis for its emission factors used for its emission estimates, and it is not clear that MDEQ has used realistic worst case emission factors.

EPA Response: The commenters did not provide any specific examples of undocumented emission factors. In our review of the emission estimates provided, MDEQ has used emission factors from AP-42 or other EPA documents, manufacturer's data, stack testing, information from past state permitting actions, data from the Michigan Air Emission Reporting System, mass balance, or some combination of these sources to estimate emissions. The data used is clearly documented by MDEQ for each estimate. There are a few exemptions that do not result in emissions of any criteria pollutant or any pollutant at all. In those circumstances, MDEQ has provided an explanation of why those processes would not result in emissions of a pollutant regulated under section 110 of the Act. For example, Michigan R. 336.1285(2)(ii) exempts “fuel cells that use phosphoric acid, molten carbonate, proton exchange membrane, or solid oxide or equivalent technologies.” In their analysis, MDEQ does not provide an emission calculation, but provides an explanation for why no emissions of criteria pollutants are expected from this technology. EPA finds that MDEQ has used appropriate sources for emission factors and that the commenters have provided no evidence supporting their claims.

Comment 3: EPA's proposed approval of these exemptions fail to fulfill the purpose of the minor NSR regulations. The December 31, 2002, major source permitting rule revisions significantly revised and limited applicability to major source permitting for modifications at major sources. In justifying that rulemaking, EPA cited to state's minor NSR rules as providing the needed oversight of modifications at existing major source in the cases where modifications at major sources could more readily be considered minor modifications. For example, EPA stated in the preamble to the 2002 rules that it anticipated a “large majority of the projects that are not major modifications may nonetheless be required to undergo a permit action through States' minor NSR permit programs” and stated that such programs could provide an opportunity to ensure that the permitting authority agrees with a source's emission projections.

EPA Response: EPA disagrees that the MDEQ minor NSR permitting program will not address “a large majority of the projects that are not major modifications.” In the 2002 rulemaking, EPA did not state that every change that was no longer subject to the major source permitting requirements due to NSR Reform would be picked up by the state minor NSR programs, and statements in the preamble to NSR Reform are not evidence that the Michigan minor NSR program is not part of a program serving the intended purpose of section 110(a)(2)(C) of the Act to prevent construction that would interfere with attainment and maintenance of the NAAQS. MDEQ has been implementing these exemptions for over a decade and EPA is not aware of a NAAQS violation resulting from their use and the commenters have not presented any specific evidence that they could result in a violation.

2. Rule Specific Commentsa. Michigan R. 336.1285(2)(a) PTI Exemptions

Michigan R. 336.1285(2)(a) exempts “routine maintenance, parts replacement, or other repairs that are considered by the department to be minor, or relocation of process equipment within the same geographical site not involving any appreciable change in the quality, nature, quantity, or impact of the emission of an air contaminant therefrom.” The rule also includes examples of changes that would be covered by the exemption. These examples help to define the scope of changes MDEQ intended the exemption to cover. EPA specifically noted concerns with this exemption in a November 9, 1999, proposed disapproval. This exemption is part of the approved SIP. Michigan had made some fairly minor changes such as changing the word “commission” to “Department.” The only substantive change was the addition of the word “routine.” Because it might be interpreted as defining “routine maintenance, repair and replacement” under the major source permitting rules, EPA was concerned that the ambiguity might lead to sources inappropriately applying the exemption to major source permitting. There have been significant changes to the structure of MDEQ's major source permitting rules since 1999. At that time, PSD permits were issued pursuant to a delegation of 40 CFR 52.21 through the general requirements of the Part 2 rules. The state's major non-attainment permitting rules were also included in Part 2 at that time. MDEQ now has a SIP approved PSD program, and the major source permitting requirements have been moved to separate sections of the Michigan Administrative Code. The PSD rules are in Part 18 and the major NSR rules are in Part 19. EPA believes the previously listed concerns are effectively addressed by the requirements of Michigan R. 336.1278 and 336.1278a in conjunction with the move of major source applicability criteria to separate rule sections.

Comment 1: The terms “minor” and “appreciable” are vague, undefined terms that are subject to varying interpretations. Given that the facilities will be making the determinations of whether an activity can be exempt under Michigan R. 336.1285(2)(a) and not MDEQ, the likelihood of wide and varying interpretations of this provision are great, and thus the limitations of this exemption are unenforceable. The minor NSR provisions for SIPs at 40 CFR 51.160(a) and (e) require the state to clearly define the sizes and types of sources subject to review and to do so through legally enforceable procedures, and MDEQ has not done so.

EPA Response: EPA disagrees that the cited terms make the limitations unenforceable. We believe that the terms, in context, have their common meanings, and that MDEQ has satisfactorily described the intent of these rules. For example, the state's interpretation of “appreciable” as stated in their May 15, 2012, letter is the common definition of the word, “capable of being perceived or measured.” A change in emissions that is capable of being measured is actually a fairly restrictive limitation. EPA also believes that the state has developed adequate policy for their permitting program and exemptions to minimize the likelihood of misuse. More importantly, on page 11 of the document “Response to the United States Environmental Protection Agency's May 12, 2014, Need for Additional 110(l) Analysis,” included in the 2017 submittal, MDEQ has clearly indicated that this exemption “is in no way intended to define routine maintenance, repair and replacement,” and confirm their adherence to current EPA policy on the matter.

Comment 2: The fact that this rule allows “relocation of process equipment within the same geographical site is extremely problematic, as any relocation of a source of air emission can change that source's impact on air quality and can negate any prior air quality analyses that have been done for the source.

EPA Response: This is language that has already been approved into the Michigan SIP, and is not open for comment through this action.

Comment 3: This rule could be considered to redefine “routine maintenance, repair, and replacement” under the major source PSD and nonattainment NSR rules. This was a concern raised by EPA, to which MDEQ responded to in part that its “Part 2 exemptions are designed for use by small emitting sources.” However, nothing in the PTI rules or exemptions limit those permit requirements to “small emitting sources.” Indeed, the PTI program encompasses PSD and nonattainment NSR requirements and activities at existing major source subject to PTI requirements.

EPA Response: As stated previously, EPA believes the additional restrictions included in Michigan R. 336.1278 and R. 336.1278a have adequately addressed these concerns. MDEQ clearly requires that a source first determine that a change is not subject to major source permitting requirements prior to implementing any of the listed exemptions. Furthermore, MDEQ has confirmed their adherence to current EPA guidance on routine maintenance, repair and replacement in the 2017 submittal as described above.

Comment 4: While Michigan R. 336.1285(2)(a) gives examples of the types of parts replacement it considers to be “minor,” some of those examples could be construed as allowing component replacement that should not be considered routine. Specifically, Michigan provides examples that include replacement of fans, pumps, or motors “that do not alter the operation of the source,” replacement of boiler tubes, replacement of engines, compressor or turbines “as part of a normal maintenance program.”

EPA Response: See response to comment 3 above.

b. Michigan R. 336.1285(2)(b) PTI Exemptions

Michigan R. 336.1285(2)(b) exempts “changes in a process or process equipment which do not involve installing, constructing, or reconstructing an emission unit and which do not involve any meaningful change in the quality and nature or any meaningful increase in the quantity of the emission of an air contaminant therefrom.”

Comment 1: This rule has vague, undefined terms such as “any meaningful change,” “quality” or “nature” of emissions, and “any meaningful increase in the quantity of emissions.” It is unclear from the rule how changes are to be evaluated and the criteria upon which “meaningful” would be judged. This provision is clearly not enforceable and thus does not meet the minor NSR provisions of 40 CFR 51.160(a) and (e) to clearly define the sizes and types of sources subject to review and to do so through legally enforceable procedures.

EPA Response: EPA disagrees that the cited terms make the limitations unenforceable. We believe that the terms, in context, have their common meanings, and that that MDEQ has satisfactorily described the intent of these rules. In its May 15, 2012, letter, MDEQ states that “meaningful” would be defined as “having meaning or purpose.” In the context of a minor construction permitting program that would include a change that would result in an increase that could interfere with the NAAQS or increment. The rule also lists examples of changes that could be allowed by the rule such as a change in supplier of a particular raw material. While EPA agrees that there is some ambiguity in the term “meaningful,” the examples in the rule itself are adequate to appropriately narrow the scope of the exemption.

Comment 2: Many of the examples of the types of changes identified in the rule that might be allowable are concerning and could allow a modification that should be reviewed for major NSR applicability. The fact that the rule limits changes to those which do not involve installing, constructing, or reconstructing an emission unit is not sufficiently protective given that the exemption still allows modifying an emissions unit. While the provisions of the rule are vague and subject to interpretation, the examples given in the rule of the types of process changes that could be exempt from a PTI show that emission increases could occur without review. EPA itself recognized this when it requested MDEQ complete an analysis under Section 110(l) of the Act.

EPA Response: EPA's request for an analysis under section 110(l) of the Act was in no way an indication that EPA believed this exemption would allow major modifications to go unpermitted. States are obligated to provide an analysis under Section 110(l) for any changes to coverage under the approved SIP. As discussed previously in this action, EPA is satisfied that the changes that MDEQ has made to Michigan R. 336.1278 and 336.1278a, will prevent the use of the exemptions for actions that are subject to major construction permitting requirements. Major NSR and/or PSD applicability must be determined pursuant to Michigan Rules Part 18 and Part 19 before the exemptions in Part 2 can be applied.

“Changes in a process or process equipment that do not involve installing, constructing, or reconstructing an emission unit and that involve a meaningful change in the quality and nature or a meaningful increase in the quantity of the emission of an air contaminant resulting from any of the following:

(i) Changes in the supplier or supply of the same type of virgin fuel, such as coal, no. 2 fuel oil, no. 6 fuel oil, or natural gas.

(ii) Changes in the location, within the storage area, or configuration of a material storage pile or material handling equipment.

(iii) Changes in a process or process equipment to the extent that such changes do not alter the quality and nature, or increase the quantity, of the emission of the air contaminant beyond the level which has been described in and allowed by an approved permit to install, permit to operate, or order of the department.”

Comment 1: EPA apparently decided no increase in emissions would occur with this exemption; however, it is clear that actual emissions could increase with this exemption. Further, if there are no allowable emissions limits described for a pollutant or emissions unit in a permit or MDEQ order, then it appears even allowable emissions could increase under this exemption. Changes in types of coal burned can significantly increase emissions and therefore could actually impact the NAAQS.

EPA Response: EPA disagrees with the commenter. Michigan R. 336.1285(2)(c)(i) is limited to a change in supplier or supply of the same type of fuel. EPA would not expect state minor NSR programs create limits on the supplier of a raw material and the potential impact on emissions from a change in supplier is minimal. Nothing in this rule would allow a facility to change the type of fuel combusted as suggested by the commenter. Michigan R. 336.1285(2)(c)(ii) only allows moving storage piles or equipment within the existing storage area. A change in the location of equipment and storage piles should have no impact on the quantity of emissions; furthermore, when modelling impact on NAAQS from a storage area, total emissions from the storage area are modeled as an area source. Specific locations of piles or handling equipment are not modeled. Because the rule limits changes to the existing storage area, we would not expect an impact on the NAAQS with these types of changes either. Finally, Michigan R. 336.1285(2)(c)(iii) specifically excludes changes that would increase the quantity of emissions beyond that already allowed in a permit or order issued by MDEQ. Therefore, a change in the type of fuel combusted that results in an increase in emissions, as suggested by the commenter, would be excluded from the use of this exemption.

Comment 2: It must be pointed out that the exemptions in Michigan R. 336.1285(2)(c), being based essentially on a comparison of allowable-to-allowable emission increases, is based on an entirely inconsistent emissions increase approach than the major source permitting rules. The Courts have previously found that allowable-to-allowable emissions test are not authorized under major source permitting programs.

EPA Response: As previously discussed in this document, nothing in these rules impact applicability under major source permitting programs. MDEQ clearly requires that a source first determine that a change is not subject to major source permitting requirements prior to implementing any of the listed exemptions. With respect to requirements for applicability under minor NSR programs, the requirements of section 110(a)(2)(C) and 40 CFR 51.160 do not expressly require the use of any particular applicability test, and therefore do not prohibit the use of an allowable-to-allowable or actual-to-actual test.

Comment 3: Michigan R. 336.1285(2)(c)(ii) could readily allow a source to violate terms of an existing permit (including a major source PSD or non-attainment NSR permit) by allowing changes in the location or configuration of a material storage pile or material handling equipment. Any air modeling analysis that was done for such a source would have considered the location of material handling emissions in relation to publicly accessible land and roads. Given that fugitive emissions from material handling and/or storage piles have in many cases been modeled to cause or contribute to violations of the NAAQS or PSD increments for particulate matter (PM), particulate matter with an aerodynamic diameter less than or equal to 10 microns (PM10) and particulate matter with an aerodynamic diameter less than or equal to 2.5 microns (PM2.5), this cannot be considered as protective of the NAAQS.

EPA Response: Michigan R. 336.1278(4) states that the exemptions only apply to the requirement to obtain a PTI and “do not exempt any source from complying with any other applicable requirement or existing permit limitation.” Therefore, no exemption in Michigan R. 336.1280 through 336.1290 would allow a source to violate terms of an existing permit as suggested by the commenter. Furthermore, as discussed above, the exemption limits relocation of equipment and piles to within the existing storage area. Due to the way in which emissions from storage areas are addressed in a modeling analysis this would result in no impact on previous modeling.

d. Michigan R. 336.1285(2)(d)-(f)

Michigan R. 336.1285(2)(d) exempts the replacement or reconstruction of air pollution control equipment with equivalent or more efficient control equipment. Michigan R. 336.1285(2)(e) exempts the installation of control equipment required by a National Emission Standard for Hazardous Air Pollutants. Michigan R. 336.1285(2)(f) exempts the installation and construction of air pollution control equipment that does not result in a significant increase in a pollutant from the pollution controls.

Comment 1: EPA did not require a section 110(l) analysis for Michigan R. 336.1285(d); however, this provision could allow for the replacement of existing controls with controls that could create a new source of emissions. For example, if a scrubber is installed at a unit utilizing dry sorbent injection for sulfur dioxide (SO2) control, the scrubber would add sources such as lime delivery and storage for scrubber waste disposal. EPA should not have excluded this provision from the requirement for a section 110(l) analysis.

EPA Response: See EPA response to comments on the 110(l) analysis in Section II. F. below.

e. Michigan R. 336.1285(2)(g)-(mm)

Comment: Michigan R. 336.1285(2)(g)-(mm) provide for 33 specific and diverse exemptions from the PTI requirements. There are certain activities that seem as if they could be significant sources of air emissions, especially because a company could claim multiple PTI exemptions from these activities.

EPA Response: As explained previously, EPA believes the limiting language in Michigan R. 336.1278 and 336.1278a is sufficient to ensure that projects subject to major construction permitting requirements are excluded from the use of the exemptions. EPA has also previously addressed the definition of activity in the rule and believes that the rule requires the appropriate aggregation of multiple small changes when making applicability decisions.

f. Michigan R. 336.1280-336.1284 and Michigan R. 336.1286-336.1290

Comment: There are certain activities in Michigan R. 336.1280 through 336.1284 and Michigan R. 336.1286 through 336.1290 that seem as if they could be significant sources of air emissions, especially because a company could claim multiple PTI exemptions from these activities.

EPA Response: As explained previously, EPA believes the limiting language in Michigan R. 336.1278 and 336.1278a is sufficient to ensure that projects subject to major construction permitting requirements are excluded from the use of the exemptions. EPA has also previously addressed the definition of activity in the rule and believes that the rule requires the appropriate aggregation of multiple small changes when making applicability decisions.

F. Comments Concerning the 110(l) Demonstration

EPA received several comments regarding the 110(l) analysis provided by MDEQ. Section 110(l) of the CAA states that “[t]he Administrator shall not approve a revision of a plan if the revision would interfere with any applicable requirement concerning attainment and reasonable further progress or any other applicable requirement of this chapter.” 42 U.S.C. 7410(l). EPA does not interpret section 110(l) to require a full attainment or maintenance demonstration before any changes to a SIP may be approved. Generally, a SIP revision may be approved under section 110(l) if EPA finds it will at least preserve status quo air quality. See Kentucky Resources Council, Inc. v. EPA, 467 F.3d 986 (6th Cir. 2006); GHASP v. EPA, No. 06-61030 (5th Cir. Aug. 13, 2008); see also, e.g., 70 FR 53 (Jan. 3, 2005), 70 FR 28429 (May 18, 2005) (proposed and final rules, upheld in Kentucky Resources, which discuss EPA's interpretation of section 110(l).

In considering the new exemptions in Michigan R. 336.1280 through Michigan R. 336.1290, EPA examined the emission projections provided by MDEQ in the 2003 and 2017 submittals, the structure of the existing SIP permitting rules and the structure of each new exemption, and in some cases conservative air quality analysis (modeling or qualitative analysis in the case of ozone) provided in the 2017 submittal. MDEQ's currently approved permitting SIP generally requires a PTI for any change resulting in an increase in a regulated pollutant unless the particular change falls into one of the categories of exemptions contained in Michigan R. 336.1280 through Michigan R. 336.1290. MDEQ's revisions expand the exempt categories. Several of the exempt categories would have no associated emissions of criteria pollutants. Several other categories of exemptions contain production and operation restrictions and function as a permit by rule. Where the exemption did not contain enforceable limitations on production and operation, and projected emission increases were greater than 10 tons per year of a criteria pollutant, MDEQ provided an air quality analysis. MDEQ and EPA have evaluated the impacts of the proposed revisions, and determined that they do not interfere with attainment of any NAAQS or any other CAA requirement because the use of the exemption provides the same level of control measures as the control measures that would be included in an individual construction permit, the exemption would result in little or no increase in emissions of a criteria pollutant, or MDEQ has provided a suitable air quality analysis demonstrating no interference with attainment, reasonable further progress, or any other requirement of the Act.

Comment 1: It appears that MDEQ and EPA assumed that, if emission increases were less than the major source modification significance levels, then the increase could not interfere with attainment or maintenance of the NAAQS.

EPA Response: EPA agrees that major source modification significance levels alone would be insufficient to demonstrate non-interference. As explained elsewhere in this action, MDEQ's non-interference demonstration took into account factors in addition to the significance levels, i.e., emission projections, the structure of the existing SIP permitting rules and the structure of each new exemption, and in some cases conservative air quality analysis (modeling or qualitative analysis in the case of ozone) provided in the 2017 submittal. When evaluating the effect of the new exemptions, MDEQ and EPA first considered the level of control required by the current SIP. A permit issued under the currently approved SIP does not explicitly require an air quality analysis be performed. The currently approved program ensures the establishment of control measures in the permit. A number of the exemptions are structured as prohibitory rules and as such include control measures that are similar to the control measures that would be included in an individual permit. These may include restrictions on production and operation, restrictions on size of equipment, required control technology, or limits on raw materials used, in order to qualify for the exemption. Under these circumstances, EPA finds that these prohibitory rules, or permits by rule, preserve the status quo of the existing SIP. For other exemptions, MDEQ has demonstrated that the exemption will not result in an increase in emissions or have the potential to emit a criteria pollutant at all. If the exemption has no associated criteria pollutant emissions, no further analysis is necessary. For exemptions that could result in small increases in criteria pollutants, generally less than 10 tons per year, MDEQ has presented an analysis of the observed impacts from eliminating the individual permit requirement. MDEQ has reviewed the state emissions inventory to determine the amount and magnitude of emissions from the sources that are being exempted, and they have reviewed data from monitors within the state. MDEQ has not found that moving away from an individual permit for these smaller exempted sources have resulted in violations of the NAAQS. EPA has reviewed MDEQ's analysis and agrees that no NAAQS violations would result from these small emissions increases. Furthermore, the commenter has not cited any example of an individual permit for these exempt categories that would have established any additional control measures. Finally, for the single exemption that would relax the current SIP and would result in an increase of a criteria pollutant greater than 10 tons per year, MDEQ provided a conservative modeling analysis demonstrating that exempting from permitting sources of that type and size would be unlikely to result in a violation of the NAAQS. EPA has also reviewed this modeling analysis and agrees that it supports MDEQ's conclusion.

Comment 2: The impact of an activity's emissions on air pollutant concentrations is dependent on a myriad of factors including but not limited to stack height, temperature, velocity, topography, other buildings in the vicinity, and background pollutant concentrations; therefore, no specific ton per year level of emissions can be considered as protection of the NAAQS in all locations, and especially for short term average NAAQS.

EPA Response: EPA agrees that it is not possible to set a single ton per year threshold for all situations that would prevent interference. EPA disagrees that the rules set such a ton per year threshold. As discussed elsewhere, tons per year was only one of the factors MDEQ utilized to demonstrate non-interference. As previously stated, EPA does not interpret section 110(l) to require a full attainment or maintenance demonstration before any changes to a SIP may be approved.

Comment 3: MDEQ failed to evaluate emissions for the worst-case scenario under each exemption. This is especially true for the broad exemptions of Michigan R. 336.1285 where MDEQ just gave examples of emission estimates for certain exemptions.

EPA Response: There are a few exemptions where MDEQ did not provide a worst-case analysis; however, in those cases, MDEQ has provided real world examples of how the exemptions have been applied and the resulting emissions increases that are representative of the larger projects that would likely use the exemption. For example, for Michigan R. 336.1285(2)(b)(i)(H), which exempts lengthening a paint drying oven to allow for longer curing time, the emission estimates provided by MDEQ are based on an actual project at a major auto manufacturer.

Comment 4: MDEQ failed to evaluate the cumulative emissions increases that could be exempt for a single source relying on multiple exemptions (such as adding several oil-fired equipment of less than 20 MMBtu/hour pursuant to Michigan R. 336.1282(2)(b)).

EPA Response: MDEQ has provided projected increases from each of the exemptions, and EPA has found the analysis provided by MDEQ to be reasonable. With respect to the specific example provided by the commenter, the fuel burning exemption at Michigan R. 336.1282(2)(b) is structured as a prohibitory rule. The limitations imposed by the rule are equivalent to the types of limitations that would be included in a permit under the currently approved SIP. Moving from an individual permit system to a permit by rule system would preserve the status quo of the existing SIP.

Comment 5: EPA did not require a Section 110(l) analysis for Michigan R. 336.1285(2)(d) which allows for replacement of an air pollution control equipment with equivalent or more efficient equipment. However, this provision could allow an increase in emissions—for example, if a scrubber is installed at a unit utilizing dry sorbent injection for SO2 control, the scrubber would add sources such as lime delivery and storage and for waste disposal. Thus, EPA should not have exempted this rule from a 110(l) analysis.

EPA Response: EPA did not exempt this rule from 110(l) requirements. EPA did determine that no additional analysis beyond the analysis of the exemption included with the 2003 submittal was necessary. As discussed above, EPA does not interpret 110(l) as requiring a full attainment or maintenance demonstration. The exemption is limited to the replacement of existing controls with identical or more efficient controls. Some form of add-on control technology must already exist to use this exemption. In the example provided by the commenter, where a source replaced a dry flue gas desulfurization unit with a wet flue gas desulfurization unit, both the existing controls and the new controls would have used lime in the process. The facility would have already had sources associated with lime delivery and storage, and both controls result in waste material.

Comment 6: While EPA required a 110(l) analysis for Michigan R. 336.1285(2)(e) and (f), MDEQ simply evaluated the emission increase from a couple of examples and did not estimate worst case emissions.

EPA Response: EPA believes that the examples selected by MDEQ are representative of the types of changes that would actually use the exemptions.

Comment 7: EPA and MDEQ have not demonstrated that permit exemptions for activities with emission increases less than PSD significance levels will not interfere with attainment or maintenance of the NAAQS and will otherwise be consistent with the requirements of the Act.

EPA Response: EPA's conclusion that the changes to exempt categories will not interfere with attainment or maintenance of the NAAQS is not based on the assumption that increases less than the PSD significance thresholds will not impact the NAAQS. As discussed above, EPA does not interpret section 110(l) to require a full attainment or maintenance demonstration before any changes to a SIP may be approved. In considering the new exemptions in Michigan R. 336.1280 through Michigan R. 336.1290, EPA examined the emission projections provided by MDEQ in the 2003 and 2017 submittals, the structure of the existing SIP permitting rules and the structure of each new exemption, and in some cases conservative air quality analysis (modeling or qualitative analysis in the case of ozone) provided in the 2017 submittal.

Comment 8: MDEQ's modeling demonstrates that emission increases at levels much lower than the PSD significance levels could threaten attainment of the NAAQS and that other contributing factors such as stack characteristics and background concentration of an area must also be taken into account. Furthermore, because the modeling performed shows modeled concentrations near the 24-hour PM2.5 NAAQS, MDEQ's modeling demonstrates that Michigan R. 336.1285(p) could result in a violation of a NAAQS.

EPA Response: The modeling submitted in support of Michigan R. 336.1285(2)(p) is sufficiently conservative to demonstrate that the exemption is unlikely to result in a violation of a NAAQS. While the modeled concentration for larger tower dryers when combined with a conservative background are approaching the 24-hour PM2.5 NAAQS, this type of equipment is uncommon in the state of Michigan and would be located in rural areas where background concentrations tend to be lower. The more common column dryers would have a significantly lower impact on PM2.5 concentrations.

EPA Response: As stated above EPA does not interpret section 110(l) to require a full attainment or maintenance demonstration before any changes to a SIP may be approved. When evaluating the effect of any new exemption, EPA must first consider the level of control required by the current SIP. In this case, the evaluation concerns the effect of the individual construction permit issued as required by the currently approved permitting rules. A permit issued under the currently approved SIP does not explicitly require an air quality analysis be performed. What is assured under the currently approved program is the establishment of control measures in the permit. A number of the exemptions are structured as prohibitory rules and include control measures that are similar to the control measures that would be included in an individual permit. These may include restrictions on production and operation, restrictions on size of equipment, required control technology, or limits on raw materials used. Under these circumstances, EPA finds that these prohibitory rules, or permits by rule, preserve the status quo of the existing SIP.

Comment 10: In the proposed approval EPA states, “where an exemption could result in an increase of a regulated pollutant in amounts greater than 10 tons per year, MDEQ provided modeling, or in the case of ozone, a qualitative analysis to demonstrate that the emissions that could result from the exempt categories would have no significant impact on compliance with the NAAQS.” A modeling analysis was only included for Michigan R. 336.1285(2)(p), yet a review of Attachment H to the 2003 submittal shows several categories with estimates exceeding 10 tons per year. Specifically, the commenter has identified the fuel burning equipment exemptions in Michigan R. 336.1282(2)(b).

EPA Response: EPA disagrees to the extent that the commenter is suggesting that a demonstration of non-interference requires modeling for all exemptions. As previously discussed, the fuel burning exemptions in Michigan R. 336.1285(b) are structured as permits by rule and contain enforceable restrictions on capacity and raw materials which are equivalent to the controls that would be included in a permit under the currently approved SIP. Moving from an individual permit system to a permit by rule system would preserve the status quo of the existing SIP. The only exemption that relaxes the current SIP permitting requirements with a resulting increase greater than 10 tons per year is the grain handling exemption at Michigan R. 336.1285(p), for which MDEQ provided a modeling analysis showing that the revision would not interfere with attainment of the NAAQS.

G. Comments Concerning the Docket

Approximately a week before the end of the first comment period for this rulemaking, EPA was informed of issues with the electronic docket at regulations.gov. The docket incorrectly linked to numerous unrelated documents. Additionally, upon review, EPA noted that certain documents related to the rulemaking were not present. The interested parties requested that the docket be fixed and that EPA extend the comment period. Because of the lack of time remaining on the comment period, EPA was unable to extend the comment period, and informed the interested parties that EPA would address the docket issues and reopen the comment period for an additional 30 days. The comments received after the close of the first comment period noted the docket issues in the comments. EPA added missing information to the docket in September 2017 and published a notice reopening the comment period for 30 days on November 2, 2017.

In comments received during the first reopening, commenters noted that the electronic file for the September 2003 submittal from MDEQ was missing an attachment. The missing information was added to the electronic docket in November of 2017, and the interested parties were informed that EPA would reopen the comment period for a second time for a period of 15 days. The second reopening of the comment period was published on January 9, 2017. EPA believes that the correction of the electronic docket and the two notices reopening the comment period for the rulemaking address all comments related to missing information in the docket.

The comments received during the first reopening also noted that EPA had included copies of several MDEQ policy documents to the docket. The commenters noted that if EPA is proposed to approve any of these documents as part of the SIP, EPA must issue a revised proposed rulemaking making clear to the public which documents it is proposing to approve. EPA is not approving these documents into the SIP and the summary of documents EPA is incorporating into the SIP in Section VI “Incorporation by Reference” in the proposed rulemaking is correct. The policy documents were added because EPA thought they would be of interest to the public. EPA is not relying on these documents to support approval of the rules, and there is no need to re-propose based on the addition of these documents to the docket as suggested by the commenters.

III. What action is EPA taking?

EPA is approving all changes submitted by MDEQ except for changes to Michigan R 336.1205 which includes provisions for public notice. EPA will not be taking any action with respect to the changes in public notice and will be addressing Michigan R 336.1205 in a separate action. The already approved public notice procedures will remain in the SIP until EPA takes action on Michigan R 336.1205.

IV. Incorporation by Reference

In this rule, EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is finalizing the incorporation by reference of the Michigan Regulations described in the amendments to 40 CFR part 52 set forth below. EPA has made, and will continue to make, these documents generally available through www.regulations.gov and at the EPA Region 5 Office (please contact the person identified in the For Further Information Contact section of this preamble for more information). Therefore, these materials have been approved by EPA for inclusion in the State implementation plan, have been incorporated by reference by EPA into that plan, are fully federally enforceable under sections 110 and 113 of the Act as of the effective date of the final rulemaking of EPA's approval, and will be incorporated by reference in the next update to the SIP compilation.1

1 62 FR 27968 (May 22, 1997).

V. Statutory and Executive Order Reviews

Under the Act, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Act. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:

• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);

• Is not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because SIP approvals are exempted under Executive Order 12866;

• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);

• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.);

• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);

• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Act; and

• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this action and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. A major rule cannot take effect until 60 days after it is published in the Federal Register. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by October 30, 2018. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

The Environmental Protection Agency (EPA) is approving a state implementation plan (SIP) revision submitted by the District of Columbia (the District) that pertains to the good neighbor and interstate transport requirements of the Clean Air Act (CAA) for the 2008 ozone national ambient air quality standards (NAAQS). The CAA's good neighbor provision requires EPA and states to address the interstate transport of air pollution that affects the ability of other states to attain and maintain the NAAQS. Specifically, the good neighbor provision requires each state in its SIP to prohibit emissions that will significantly contribute to nonattainment, or interfere with maintenance, of a NAAQS in another state. The District submitted a SIP revision on June 13, 2014 that addresses the interstate transport requirements for the 2008 ozone NAAQS. On July 5, 2018, EPA published a proposed rule for just the good neighbor provision of the District's June 13, 2014 submittal. EPA is approving the District's SIP as having adequate provisions to meet the requirements of the good neighbor provision for the 2008 ozone NAAQS in accordance with section 110 of the CAA.

DATES:

This final rule is effective on October 1, 2018.

ADDRESSES:

EPA has established a docket for this action under Docket ID Number EPA-R03-OAR-2014-0701. All documents in the docket are listed on the http://www.regulations.gov website. Although listed in the index, some information is not publicly available, e.g., confidential business information (CBI) or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the internet and will be publicly available only in hard copy form. Publicly available docket materials are available through http://www.regulations.gov, or please contact the person identified in the For Further Information Contact section for additional availability information.

FOR FURTHER INFORMATION CONTACT:

Ellen Schmitt, (215) 814-5787, or by email at schmitt.ellen@epa.gov.

SUPPLEMENTARY INFORMATION:I. Background

On June 13, 2014, the District Department of the Environment (DDOE) on behalf of the District submitted a revision to its SIP to satisfy the requirements of section 110(a)(2) of the CAA for the 2008 ozone NAAQS. On April 13, 2015 (80 FR 19538), EPA approved all parts of the District's June 13, 2014 submittal with the exception of the portion of the submittal that addressed section 110(a)(2)(D)(i)(I) of the CAA. Section 110(a)(2)(D)(i)(I), also called the good neighbor provision, consists of two prongs that require that a state's 1 SIP must contain adequate provisions to prohibit any source or other type of emissions activity within the state from emitting air pollutants that “contribute significantly to nonattainment in, or interfere with maintenance by, any other state with respect to any such national primary or secondary ambient air quality standard.” Under section 110(a)(2)(D)(i)(I) of the CAA, EPA gives independent significance to the matter of nonattainment (prong 1) and to that of maintenance (prong 2).

1 The term state has the same meaning as provided in CAA section 302(d) which specifically includes the District of Columbia.

On July 5, 2018 (83 FR 31350), EPA published a notice of proposed rulemaking (NPR) for the District of Columbia, approving the portion of the June 13, 2014 District SIP revision addressing prongs 1 and 2 of the interstate transport requirements for section 110(a)(2)(D)(i)(I) for the 2008 ozone NAAQS.2

2 All the other infrastructure SIP elements for the District for the 2008 ozone NAAQS were addressed in a separate rulemaking. See 80 FR 19538 (April 13, 2015).

II. Summary of SIP Revision and EPA Analysis

In its June 13, 2014 submittal, the District identified the implemented regulations within its SIP that limit nitrogen dioxide (NOX) and/or volatile organic compound (VOC) emissions from District sources.3 The District indicates that there are no electric generating units (EGUs) 4 or other large industrial sources of NOX emissions within the District. In the submittal, the District also included information on non-EGUs and mobile sources and listed the SIP-approved measures that help to reduce NOX and VOC emissions from non-EGU and mobile sources within the District. In the submittal, the District points out that it will continue to rely on federal measures to reduce NOX emissions from onroad and nonroad engines. The District states its sources are already well controlled, and states further reductions beyond the District's current SIP measures are not economically feasible.

3 Both NOX and VOCs are precursors to ozone formation.

4 The District's last remaining EGUs were decommissioned in 2012, in part to meet permit requirements incorporated into the District's Regional Haze SIP. 77 FR 5191 (February 2, 2012).

EPA evaluated the District's submittal for the 2008 ozone NAAQS, considering: Ozone precursor emissions; an analysis of District source sectors; and in-place controls and regulations. Due to the District's small number of sources and the high cost of further reductions, EPA proposed in its July 5, 2018 NPR that the District's SIP, as presently approved, contains adequate measures to prevent District sources from interfering with maintenance or contributing significantly to nonattainment in another state for the 2008 ozone NAAQS. The rationale for EPA's proposed action was discussed in greater detail in the NPR and accompanying technical support document (TSD) and will not be restated here.

In this rulemaking action, EPA is approving one portion of the District's June 13, 2014 submittal—the portion addressing prongs 1 and 2 of section 110(a)(2)(D)(i)(I) of the CAA. EPA previously acted on other portions of Delaware's June 13, 2014 SIP submittal for the 2008 ozone NAAQS.5

5 On April 13, 2015 (80 FR 19538), EPA approved portions of the District's June 13, 2014 submittal for the 2008 ozone NAAQS addressing the following: CAA section 110(a)(2)(A), (B), (C), (D)(i)(II), (D)(ii), (E), (F), (G), (H), (J), (K), (L), and (M). In that action, EPA stated it would take later action on the portion of the June 13, 2014 SIP submittal addressing section 110(a)(2)(D)(i)(I) of the CAA.

III. Comments and EPA's Response

EPA received a total of four anonymous comments on the July 5, 2018 NPR. All of the comments received are included in the docket for this action. Three of the comments did not concern any of the specific issues raised in the NPR, nor did they address EPA's rationale for the proposed approval of the District's submittal. Therefore, EPA is not responding to those comments. EPA did receive one comment considered to be relevant to this rulemaking action.

The commenter indicates that EPA was supposed to take action on the District's SIP revision within 12 months of receiving the SIP submittal. The commenter also indicates the length of time (4 years) it took for EPA to approve the SIP revision from the time of its submittal and questions if transported pollution could have been eliminated if SIP revisions like this one were approved in a timely manner. The commenter asks what air quality and human health impacts the delay of this action has had on neighboring states.

EPA acknowledges that it missed the statutory deadline to take action on the good neighbor portion of the District's June 13, 2014 SIP submittal.6 However, at this time, EPA is taking final action on this SIP revision, and by doing so it will meet all such outstanding obligations under the CAA. The commenter provided no analysis of the statutory consequences, if any, from the action. Further, EPA disagrees with the commenter's questioning that the delayed action on the good neighbor portions of the District's SIP revision has impacted air quality and human health in neighboring states. As explained in the NPR, EPA believes that the District's SIP, as presently approved, contains adequate measures to prevent District sources from interfering with other states' attainment and/or maintenance for the 2008 ozone NAAQS. Thus, EPA's late action on the good neighbor portion of the District of Columbia's June 13, 2014 SIP submittal did not cause any delay in air quality and human health protections as the SIP relies on already in-place regulations and controls that prevent District sources from significantly contributing to nonattainment, or interfering with maintenance, of the 2008 ozone NAAQS in another state.

6 For clarification, section 110(k)(2) requires EPA to take action 12 months after a SIP revision becomes complete, not 12 months after it is submitted, as the commenter indicates.

IV. Final Action

EPA is approving the portion of the June 13, 2014 District SIP revision addressing prongs 1 and 2 of the interstate transport requirements for section 110(a)(2)(D)(i)(I) of the CAA for the 2008 ozone NAAQS.

On April 13, 2015 (80 FR 19538), EPA approved the following infrastructure elements or portions thereof from the June 13, 2014 submittal: CAA section 110(a)(2)(A), (B), (C), (D)(i)(II), (D)(ii), (E), (F), (G), (H), (J), (K), (L), and (M). This action approves the remaining portions of the June 13, 2014 SIP revision, which address prongs 1 and 2 of section 110(a)(2)(D)(i)(I) of the CAA, also known as the good neighbor provision. EPA did not take action upon these elements in the Agency's prior SIP approval action, published on April 13, 2015 (80 FR 19538).

V. Statutory and Executive Order ReviewsA. General Requirements

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the CAA and applicable federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves state law as meeting federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:

• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);

• is not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because SIP approvals are exempted under Executive Order 12866.

• does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);

• is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.);

• does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);

• does not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and

• does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, this rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.

B. Submission to Congress and the Comptroller General

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this action and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. A major rule cannot take effect until 60 days after it is published in the Federal Register. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

C. Petitions for Judicial Review

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by October 30, 2018. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action, addressing the District of Columbia's good neighbor provision for the 2008 ozone NAAQS, may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

PART 52—APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS1. The authority citation for part 52 continues to read as follows:Authority:

42 U.S.C. 7401 et seq.

Subpart J—District of Columbia2. In § 52.470, the table in paragraph (e) is amended by adding a new entry for “Section 110(a)(2) Infrastructure Requirements for the 2008 Ozone NAAQS” after the existing entry for “Section 110(a)(2) Infrastructure Requirements for the 2008 Ozone NAAQS” to read as follows:§ 52.470 Identification of plan.

The Environmental Protection Agency (EPA) is approving portions of State Implementation Plan (SIP) submissions from Colorado, Montana, North Dakota, South Dakota and Wyoming addressing the Clean Air Act (CAA or Act) interstate transport SIP requirements for the 2010 sulfur dioxide (SO2) National Ambient Air Quality Standard (NAAQS). These submissions address the requirement that each SIP contain adequate provisions prohibiting air emissions that will have certain adverse air quality effects in other states. The EPA is approving portions of these infrastructure SIPs for the aforementioned states as containing adequate provisions to ensure that air emissions in the states will not significantly contribute to nonattainment or interfere with maintenance of the 2010 SO2 NAAQS in any other state.

DATES:

This rule is effective on October 1, 2018.

ADDRESSES:

The EPA has established a docket for this action under Docket ID Number EPA- EPA-R08-OAR-2018-0109. All documents in the docket are listed on the http://www.regulations.gov website. Although listed in the index, some information is not publicly available, e.g., confidential business information (CBI) or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the internet and will be publicly available only in hard copy form. Publicly available docket materials are available through http://www.regulations.gov, or please contact the person identified in the “For Further Information Contact” section for additional availability information.

On June 4, 2018, the EPA proposed to approve submissions from Colorado, Montana, North Dakota, South Dakota and Wyoming as meeting the interstate transport requirements of CAA section 110(a)(2)(D)(i)(I) for the 2010 SO2 NAAQS (83 FR 25617). An explanation of the CAA requirements, a detailed analysis of the states' submissions, and the EPA's rationale for approval of each submission were all provided in the notice of proposed rulemaking, and will not be restated here. The public comment period for this proposed rule ended on July 5, 2018. The EPA received one comment letter from the North Dakota Department of Health (NDDH), one comment letter from the Wyoming Department of Environmental Quality (WDEQ) and six anonymous comments on the proposal. The six anonymous comments lacked the required specificity to the Colorado, Montana, North Dakota, South Dakota or Wyoming SIP submissions and the interstate transport requirements of CAA section 110(a)(2)(D)(i)(I). NDDH and WDEQ's comments are addressed below, while the anonymous comments are not addressed because they fall outside the scope of our proposed action.

II. Response to Comments

Comment: NDDH stated that the 2010 and 2016 SO2 emissions levels for their state listed in the proposal rule's “Table 1—SO2 Emission Trends” (83 FR 25618) appeared too high, and that the 2000-2016 SO2 reduction in the table for North Dakota should be 79% rather than the 44% listed in this Table 1. In addition to this recommended correction, NDDH agreed with the EPA's proposed approval of CAA section 110(a)(2)(D)(i)(I) for the 2010 SO2 NAAQS for the state of North Dakota, asserting that “sources in North Dakota do not significantly contribute to SO2 concentrations in nonattainment or maintenance areas in other states.” NDDH stated that SO2 emissions in North Dakota continue to decrease, specifically noting the shutdown of the coal-fired electric generating unit Stanton Station in 2017, the forthcoming conversion of the University of North Dakota heating plant from coal to natural gas (permit currently under review), and the continued replacement of coal-fired electrical generation by wind electrical generation as a portion of total electrical generation in the state between 2012 and 2017. NDDH also provided 2017 SO2 monitoring design values, showing that these levels continue to be below the 2010 SO2 NAAQS.

Response: The EPA agrees with the state that the 2010 and 2016 SO2 emission levels for North Dakota listed in “Table 1—SO2 Emission Trends” require correction. With regard to the 2016 SO2 emissions, we derived these emissions data from the EPA's “Air Pollutant Emissions Trends” web page which was updated on March 28, 2018,1 after the values for Table 1 had been calculated. For this reason, the 2016 SO2 emissions levels and the 2000-2016 SO2 emissions reduction for each state listed in Table 1 of the proposed rule are not consistent with those currently presented on the EPA's “Air Pollutant Emissions Trends” web page. Therefore, the EPA has recreated “Table 1—SO2 Emission Trends” below.

1 As noted at proposal, these values were derived using the EPA's web page https://www.epa.gov/air-emissions-inventories/air-pollutant-emissions-trends-data. Specifically, a link on this web page titled “State Average Annual Emissions Trend” which connected to a spreadsheet. As shown on the “Read Me” page of this spreadsheet, the “draft state trends” were updated on March 28, 2018. This update has caused the 2016 SO2 emissions levels in the prior iteration of the spreadsheet to change for all states.

The EPA also agrees with NDDH that the 2010 emissions value for North Dakota was incorrect in “Table 1—SO2 Emission Trends.” That value has been corrected in this revised version of the table. The 2010 SO2 emissions levels for all other states, as well as all 2000 and 2005 emissions levels, remain unchanged from those in “Table 1—SO2 Emission Trends” in the proposed rulemaking. The corrected values for North Dakota illustrate an even greater decline in emissions of SO2 than that discussed in the proposed rulemaking. The corrected values in this table are therefore consistent with the EPA's analysis in its proposed determination that emissions from North Dakota are not in violation of section 110(a)(2)(D)(i)(I).

The EPA notes that North Dakota's comment refers to “nonattainment or maintenance areas” (emphasis added) as part of its reiteration that sources within the state do not have certain downwind impacts on other states. The EPA has routinely interpreted the obligation to prohibit emissions that “significantly contribute to nonattainment” of the NAAQS in downwind states to be independent of formal designations because exceedances can happen in any area. Similarly, the EPA does not interpret the reference to “maintenance” under section 110(a)(2)(D)(i)(I) to be limited to maintenance areas, as this provision requires evaluation of the potential impact of upwind emissions on all areas that are currently measuring clean data, but may have issues maintaining that air quality. Nothing in the CAA limits states' obligations under section 110(a)(2)(D)(i)(I) to downwind areas that have been formally designated.

Regarding the additional information provided by NDDH to support the EPA's proposed conclusion that the state meets the requirements of 110(a)(2)(D)(i)(I) for the 2010 SO2 NAAQS, the EPA agrees that this information is supportive of that conclusion.

Comment: WDEQ expressed support of the EPA's proposed approval of their SIP as meeting the interstate transport requirements of CAA section 110(a)(2)(D)(i)(I) for the 2010 SO2 NAAQS. However, WDEQ disagreed with the EPA's statement in our proposal that “Wyoming's analysis does not independently address whether the SIP contains adequate provisions prohibiting emissions that will interfere with maintenance of the 2010 SO2 NAAQS in any other state.” 83 FR 25631. WDEQ asserted that its weight of evidence demonstration for prong 1, “significant contribution to nonattainment,” also adequately addresses the requirements for prong 2, “interference with maintenance.” WDEQ also stated that there were no other 2010 SO2 nonattainment or maintenance areas in neighboring states to address at the time of its submission apart from the Billings, Montana 2010 SO2 maintenance area, which WDEQ addressed in that submission when the area was still designated as nonattainment.2

2 As noted at proposal, the Billings 2010 SO2 maintenance area was in nonattainment status at the time of Wyoming's March 6, 2015 submission, and was redesignated to attainment on May 10, 2016.

Response: The EPA disagrees that WDEQ's analysis of potential impact on the Billings area represents an independent analysis of 110(a)(2)(D)(i)(I) prong 2. WDEQ's March 6, 2015 submission analyzed Wyoming's potential impact on the Billings area and the lack of additional nonattainment areas in surrounding states to determine whether the Wyoming SIP meets the requirements of prong 1 and prong 2. However, the court in North Carolina v. EPA, (531 F.3d 896, DC Cir. 2008) was specifically concerned with areas not designated nonattainment when it rejected the view that “a state can never `interfere with maintenance' unless the EPA determines that at one point it `contribute[d] significantly to nonattainment.' ” 531 F.3d at 910. The court pointed out that areas barely attaining the standard due in part to emissions from upwind sources would have “no recourse” pursuant to such an interpretation. Id. In accordance with the court's decision and as noted in our proposal, “the EPA interprets CAA section 110(a)(2)(D)(i)(I) prong 2 to require an evaluation of the potential impact of a state's emissions on areas that are currently measuring clean data, but that may have issues maintaining that air quality, rather than only former nonattainment, and thus current maintenance, areas.” 83 FR 25621. For this reason, Wyoming's analysis of the Billings area alone would not independently address 110(a)(2)(D)(i)(I) prong 2, based on the EPA's longstanding interpretation of this provision. Because WDEQ did not conduct such an analysis as part of its weight of evidence, the EPA supplemented the state's analysis (see proposal at 83 FR 25631) and proposed to find that Wyoming does not interfere with maintenance of the 2010 SO2 NAAQS in any other state.

With respect to the assertions WDEQ makes in its comments regarding maintenance areas, the EPA does not interpret the reference to “maintenance” under section 110(a)(2)(D)(i)(I) to be limited to maintenance areas. As previously described, this provision requires evaluation of the potential impact of upwind emissions on all areas that are currently measuring clean data, but may have issues maintaining that air quality. Nothing in the CAA limits states' obligations under section 110(a)(2)(D)(i)(I) to downwind areas that have been formally designated.

III. Final Action

The EPA is approving the following submission as meeting the interstate transport requirements of CAA section 110(a)(2)(D)(i)(I) for the 2010 SO2 NAAQS: Colorado's July 17, 2013 and February 16, 2018 submissions; Montana's July 15, 2013 submission; North Dakota's March 7, 2013 submission; South Dakota's December 20, 2013 submission; and Wyoming's March 6, 2015 submission. This action is being taken under section 110 of the CAA.

IV. Statutory and Executive Order Reviews

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves state law as meeting federal requirements and do not impose additional requirements beyond those imposed by state law. For that reason, this action:

• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);

• Is not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because SIP approvals are exempted under Executive Order 12866;

• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);

• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.);

• Does not contain any unfunded mandate or significantly or uniquely affect small governments, described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);

• Does not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• Is not subject to requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and

• Does not provide the EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, these SIPs are not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. The EPA will submit a report containing this action and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. A major rule cannot take effect until 60 days after it is published in the Federal Register. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by October 30, 2018. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

(f) Addition to the Colorado State Implementation Plan of the Colorado Interstate Transport SIP regarding 2010 Standards, submitted to EPA on July 17, 2013, and February 16, 2018, for both elements of CAA section 110(a)(2)(D)(i)(I) for the 2010 SO2 NAAQS.

The RHS is proposing to amend its regulations for the direct and guaranteed single family housing loan and grant programs in 7 CFR parts 3550 and 3555 by:

(1) Revising the definition of very low-, low-, and moderate-income to allow for a two-tier income limit structure (also known as income banding) within the single family housing direct loan and grant programs.

(2) Clarifying that net family assets are not considered when calculating repayment income, and that net family assets exclude amounts in voluntary retirement accounts, tax advantaged college, health, or medical savings or spending accounts, and other amounts deemed by the Agency not to constitute net family assets.

(3) Revising the methodology used to determine the area loan limits to use a percentage(s), as determined by the Agency, of the applicable local HUD section 203(b) limit.

(4) As a result of income banding, converting borrowers currently receiving payment assistance method 1 to payment assistance method 2 should they receive a subsequent loan.

(5) Revising the definition of low-income to allow for the two-tier income limit structure (income banding) within the single family housing guaranteed loan program.

Statutory Authority

Section 510(k) of Title V the Housing Act of 1949 (42 U.S.C. 1480(k)), as amended, authorizes the Secretary of Agriculture to promulgate rules and regulations as deemed necessary to carry out the purpose of that title.

Executive Order 12866

The Office of Management and Budget (OMB) has designated this rule as not significant under Executive Order 12866.

Executive Order 12988, Civil Justice Reform

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. Except where specified, all State and local laws and regulations that are in direct conflict with this rule will be preempted. Federal funds carry Federal requirements. No person is required to apply for funding under this program, but if they do apply and are selected for funding, they must comply with the requirements applicable to the Federal program funds. This rule is not retroactive. It will not affect agreements entered into prior to the effective date of the rule. Before any judicial action may be brought regarding the provisions of this rule, the administrative appeal provisions of 7 CFR part 11 must be exhausted.

Unfunded Mandates Reform Act

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effect of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, the Agency generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures to State, local, or tribal governments, in the aggregate, or to the private sector, of $100 million, or more, in any one year. When such a statement is needed for a rule, section 205 of the UMRA generally requires the Agency to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective, or least burdensome alternative that achieves the objectives of the rule.

This proposed rule contains no Federal mandates (under the regulatory provisions of Title II of the UMRA) for State, local, and tribal governments or the private sector. Therefore, this rule is not subject to the requirements of sections 202 and 205 of the UMRA.

Environmental Impact Statement

This document has been reviewed in accordance with 7 CFR part 1970, subpart A, “Environmental Policies.” It is the determination of the Agency that this action does not constitute a major Federal action significantly affecting the quality of the human environment, and, in accordance with the National Environmental Policy Act of 1969, Public Law 91-190, neither an Environmental Assessment nor an Environmental Impact Statement is required.

Executive Order 13132, Federalism

The policies contained in this rule do not have any substantial direct effect on States, on the relationship between the national government and States, or on the distribution of power and responsibilities among the various levels of government. Nor does this rule impose substantial direct compliance costs on State and local governments. Therefore, consultation with the States is not required.

Regulatory Flexibility Act

In compliance with the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) the undersigned has determined and certified by signature of this document that this rule, while affecting small entities, will not have an adverse economic impact on small entities. This rule does not impose any significant new requirements on program recipients nor does it adversely impact proposed real estate transactions involving program recipients as the buyers.

Executive Order 12372, Intergovernmental Review of Federal Programs

This program/activity is not subject to the provisions of Executive Order 12372, which require intergovernmental consultation with State and local officials. (See the Notice related to 7 CFR part 3015, subpart V, at 48 FR 29112, June 24, 1983; 49 FR 22675, May 31, 1984; 50 FR 14088, April 10, 1985.)

Executive Order 13175, Consultation and Coordination With Indian Tribal Governments

This executive order imposes requirements in the development of regulatory policies that have tribal implications or preempt tribal laws. RHS has determined that the proposed rule does not have a substantial direct effect on one or more Indian tribe(s) or on either the relationship or the distribution of powers and responsibilities between the Federal Government and the Indian tribes. Thus, this proposed rule is not subject to the requirements of Executive Order 13175.

Programs Affected

The following programs, which are listed in the Catalog of Federal Domestic Assistance, are affected by this proposed rule: Number 10.410, Very Low to Moderate Income Housing Loans (specifically the section 502 direct and guaranteed loans), and Number 10.417, Very Low-Income Housing Repair Loans and Grants (specifically the section 504 direct loans and grants).

Paperwork Reduction Act

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.), the information collection activities associated with this rule are covered under OMB Number: 0575-0172. This proposed rule contains no new reporting or recordkeeping requirements that would require approval under the Paperwork Reduction Act of 1995.

E-Government Act Compliance

RHS is committed to complying with the E-Government Act, 44 U.S.C. 3601 et. seq., to promote the use of the internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

Non-Discrimination Policy

In accordance with Federal civil rights law and U.S. Department of Agriculture (USDA) civil rights regulations and policies, the USDA, its Agencies, offices, and employees, and institutions participating in or administering USDA programs are prohibited from discriminating based on race, color, national origin, religion , sex, gender identity (including gender expression), sexual orientation, disability, age, marital status, family/parental status, income derived from a public assistance program, political beliefs, or reprisal or retaliation for prior civil rights activity, in any program or activity conducted or funded by USDA (not all bases apply to all programs). Remedies and complaint filing deadlines vary by program or incident.

Persons with disabilities who require alternative means of communication for program information (e.g., Braille, large print, audiotape, American Sign Language, etc.) should contact the responsible Agency or USDA's TARGET Center at (202) 720-2600 (voice and TTY) or contact USDA through the Federal Relay Service at (800) 877-8339. Additionally, program information may be made available in languages other than English.

To file a program discrimination complaint, complete the USDA Program Discrimination Complaint Form, AD-3027, found online at http://www.ascr.usda.gov/complaint_filing_cust.html and at any USDA office or write a letter addressed to USDA and provide in the letter all of the information requested in the form. To request a copy of the complaint form, call (866) 632-9992. Submit your completed form or letter to USDA by:

In order to improve the delivery of the single family housing loan programs and to promote consistency among the programs when appropriate, RHS proposes making the following revisions to 7 CFR parts 3550 and 3555.

(1) Revising the definition of very low-, low-, and moderate-income in § 3550.10 to allow for a two-tier income limit structure (income banding) for the single family housing direct loan and grant programs.

The revisions will help minimize the impact of varying minimum wages among states and territories and the observed disconnect between minimum wages and the low median income in many areas. Under current regulations, the income of a household with two people earning the minimum wage would exceed the low-income eligibility limit in 39 to 93 percent of the counties in 16 states and territories. In other words, under current regulations and income limits, the income from a two-person household earning minimum wage may be considered too high to qualify for a direct loan.

In accordance with Section 501(b)(4) of the Housing Act of 1949 (42 U.S.C. 1471(b)(4)), the terms “low income families or persons” and “very low-income families or persons” mean those families and persons whose income do not exceed the respective levels established for low-income families and very low-income families under the United States Housing Act of 1937 (42 U.S.C. 1437 et seq.). The income levels in the Housing Act of 1937 are generally established by the U.S. Department of Housing and Urban Development (HUD). RHS currently uses the HUD income levels without income banding. However, HUD programs authorized by the Housing Act of 1937 focus on renting as opposed to home purchases, which contributes to the disqualification of households with minimum wage earners as described above. The Agency has been operating a pilot in 23 states to test the alternate methodology of a two-tier income limit structure to address this issue.

For the pilot, the Agency used the authority in 42 U.S.C. 1437a(b)(2)(D), which provides for HUD and USDA to consult on income ceilings for rural areas, taking into account the types of programs that will use the income ceilings as well as subsidy characteristics. Based on this authority, the Agency used a two-tier income limit structure for the single family housing programs which bands together 1-4 person households using the 4-person income level set by HUD, and 5-8 person households using the 8-person income level established by HUD. The pilot has successfully served more borrowers, providing meaningful homeownership opportunities to those who would otherwise be denied. The Agency is now proposing to use income banding to determine all limits for very low-income, low-income, moderate-income, 38 year term, and adjusted median income.

Such banding has successfully been used to establish the moderate income limits in the guaranteed single family housing loan program for years (the term “moderate income” is not defined in Section 501(b)(4) of the Housing Act of 1949 and therefore is not restricted in the same way as “very low-” and “low-income”).

The Agency has consulted with HUD, and both agencies agree that the two-tier income limit approach is suitable for the USDA single family housing loan and grant programs. The impacted income definitions in § 3550.10 will be revised to simply state that the respective limit is “an adjusted income limit developed in consultation with HUD”. The two-tier income limits will be published annually via a Procedure Notice and posted to the Agency website at https://www.rd.usda.gov/files/RD-DirectLimitMap.pdf.

The Agency also proposes to revise the definition of moderate income so that it does not exceed the moderate income limit established for the guaranteed single family housing loan program. The Agency will publish a specific limit in the program handbook.

The revisions to the income definitions will ultimately allow the Agency and HUD to account for the differences between renting (which is the focus of HUD and 42 U.S.C. 1437 et seq.) and owning a home. This proposed action will improve program availability to the intended recipients.

(2) Revising § 3550.54(d) to remove the requirement that net family assets be included in the calculation of repayment income.

Currently, net family assets are considered for determining annual income, down payment purposes, and repayment income. The Agency proposes to exclude net family assets from repayment income calculations because repayment income focuses on the income of those who sign the promissory note, whereas net family assets considers the finances of other family members. Net family assets will still be considered for annual income and down payment purposes.

The Agency also proposes to revise the regulation so that the list of net family assets considered for annual income and down payment purposes would exclude amounts in voluntary retirement accounts such as individual retirement accounts (IRAs), 401(k) plans, Keogh accounts, and the cash value of life insurance policies.

In addition, the Agency proposes to exclude the value of tax advantaged college savings plans, the value of tax advantaged health or medical savings or spending accounts, and other amounts deemed by the Agency, from net family assets considered in the determination of annual income and down payments.

Excluding these types of assets when considering annual income or down payment requirements will help safeguard the assets for their intended purposes and promote a healthy financial support system for the household when it does incur education and health care costs, or enters retirement.

The Agency also proposes removing from net family assets the value, in excess of the consideration received, for any business or household assets disposed of for less than the fair market value during the 2 years preceding the income determination. This proposed change recognizes that it is not productive or meaningful to consider assets which have been disposed of in the past.

Lastly, the Agency proposes two minor changes primarily for consistency between the direct and guaranteed single family housing loan regulations. The Agency proposes to include in net family assets any equity in capital investments for consistency with the guaranteed single family housing loan regulations, as well as obtaining a full understanding of an applicant's financial condition before making a decision on a loan. In the exclusions from net family assets, the Agency proposes to change the language from “American Indian trust land” to “American Indian restricted land”. The terms “trust land” and “restricted” are often used interchangeably, and the proposed revision is for consistency between the direct and guaranteed program regulations, and will not result in any substantive changes.

(3) Revising the methodology used to determine the area loan limits in § 3550.63(a) to use a percentage(s), as determined by the Agency, of the applicable local HUD section 203(b) limit.

The revisions to the area loan limit methodology will streamline the determination of area loan limits and improve the reliability of the data set used to establish the area loan limits. The current process to annually establish the area loan limits uses a data set based on overly restrictive nationalized parameters and requires a significant amount of staff time on all levels (field, state, and national). Currently, § 3550.63(a) allows for two methods that a State Director may use to establish area loan limits. The first option is based on the cost to construct a modest home plus the market value of an improved lot based on recent sales data. The second option allows the State Director to use State Housing Authority (SHA) limits as long as the limit is within 10 percent of the cost data plus the market value of the improved lot. This second option is rarely used because the SHA limits are usually not within the 10 percent limit.

For the first option, the most widely used option, the Agency contracts with a third party that provides building cost data for real estate valuations to obtain construction costs, but those construction costs are based on parameters for homes that do not reflect the varied modest homes available to program borrowers. In addition, obtaining the market value is a time-consuming process relying on collecting and updating recent home sales data, which is particularly difficult given Agency staff appraiser shortages over the past few years.

The Agency has been operating a pilot to test the alternate methodology of basing the area loan limits on a percentage of the FHA Forward One-Family mortgage limits (the HUD 203(b) limit). Under the pilot, 80 percent of the HUD 203(b) limit was used to establish the area loan limits in selected pilot states. The 80 percent was established based on a side-by-side, county-by-county comparison of the Agency's existing area loan limits to various percentages of the HUD 203(b) limits. It was determined that 80 percent of the HUD 203(b) limits was adequate to cover the loan amounts in the majority of states (vs. lower percentages of 60-70 percent).

While the pilot states generally experienced increases in their area loan limits, the increases were not significant, in part because an applicant's qualification amount continues to be limited to repayment ability, property eligibility criteria (for example, properties financed through the program are currently subject to 2,000 square feet), and other factors. Average loan amounts in the pilot states increased 13.4 percent from Fiscal Year 2015 to 2017, while average loan amounts in the non-pilot states have increased 5.4 percent during the same period.

The Agency believes the higher percent increase in the pilot states is acceptable for several reasons. For example, the alternate methodology makes new construction under the program more feasible, and new construction can improve a rural community's housing stock and economy. In addition, this proposed action will save the Agency more than $70,000 each year (which is the cost to obtain the construction cost data set from a nationally recognized residential cost provider). A significant amount of staff time will also be saved.

The Agency will determine the percentage(s) based on housing market conditions and trends, and publish the percentage(s) in the program handbook. The resulting area loan limits will be posted to the Agency website at https://www.rd.usda.gov/files/RD-SFHAreaLoanLimitMap.pdf. The proposed change allows the Agency to adjust the percentage(s) as necessary in order to be responsive to housing market conditions and trends.

The proposed change is related to the income banding proposal, as payment assistance method 2 will more closely align the subsidy with what is actually needed for affordability. The proposed change avoids potentially over-subsidizing borrowers using payment assistance method 1 under the income banding system, and reduces the potential for negative impacts to the program's subsidy rate.

(5) Revising the definition of low-income in § 3555.10 for the single family housing guaranteed loan program to allow for the two-tier income limit structure (income banding) discussed above. The two-tier income limits will be published annually via a Procedure Notice and posted to the Agency website at https://www.rd.usda.gov/files/RD-GRHLimitMap.pdf.

The single family housing guaranteed loan program provides guarantees to lenders who make loans to low- and moderate-income borrowers in rural areas who are without sufficient resources or credit to obtain a loan without the guarantee. As mentioned, the guaranteed loan program already uses the two-tier income limit structure for moderate income limits. The proposed change would allow the two-tier income limit structure to be used for determining the very low- and low-income limits in the guaranteed loan program.

Low income. An adjusted income limit developed in consultation with HUD under 42 U.S.C. 1437a(b)(2)(D).

Moderate income. An adjusted income that does not exceed the moderate income limit for the guaranteed single family housing loan program authorized by Section 502(h) of the Housing Act of 1949, as amended.

Very low income. An adjusted income limit developed in consultation with HUD under 42 U.S.C. 1437a(b)(2)(D).

(ix) The value of tax advantaged health or medical savings or spending accounts; and

(x) Other amounts deemed by the Agency not to constitute net family assets.

4. In § 3550.63, paragraph (a)(1) is revised to read as follows in its entirety:§ 3550.63 Maximum loan amount.

(a) * * *

(1) The area loan limit is the maximum value of the property RHS will finance in a given locality. This limit is based on a percentage(s) of the applicable local HUD section 203(b) limit. The percentage(s) will be determined by the Agency and published in the program handbook. The area loan limits will be reviewed at least annually and posted to the Agency website.

(2) If a borrower receiving payment assistance using payment assistance method 1 received a subsequent loan, payment assistance method 2 will be used to calculate the subsidy for the initial loan and subsequent loan.

PART 3555—GUARANTEED RURAL HOUSING PROGRAM6. The authority citation for part 3555 continues to read as follows:Authority:

5 U.S.C. 301; 42 U.S.C. 1480(k).

Subpart A—General 2. Section 3555.10 is amended to revising the definition of “low-income” to read as follows: § 3555.10 Definitions and abbreviations.

Low-income. An adjusted income limit developed in consultation with HUD under 42 U.S.C. 1437a(b)(2)(D).

We propose to adopt a new airworthiness directive (AD) for certain The Boeing Company Model 787-8 and 787-9 airplanes. This proposed AD was prompted by a determination that certain areas in the tire/wheel threat zones could be susceptible to damage, which could result in loss of braking on one main landing gear (MLG) truck, loss of nose wheel steering, and loss of directional control on the ground when below rudder effectiveness speed. This proposed AD would require installing hydraulic tubing, a pressure-operated check valve, and new flight control software. We are proposing this AD to address the unsafe condition on these products.

DATES:

We must receive comments on this proposed AD by October 15, 2018.

ADDRESSES:

You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:

For service information identified in this NPRM, contact Boeing Commercial Airplanes, Attention: Contractual & Data Services (C&DS), 2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA 90740-5600; telephone 562-797-1717; internet https://www.myboeingfleet.com. You may view this referenced service information at the FAA, Transport Standards Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195. It is also available on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0763.

Examining the AD Docket

You may examine the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0763; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this NPRM, the regulatory evaluation, any comments received, and other information. The street address for the Docket Office (phone: 800-647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2018-0763; Product Identifier 2018-NM-052-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this NPRM. We will consider all comments received by the closing date and may amend this NPRM because of those comments.

We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this proposed AD.

Discussion

Boeing determined that certain areas in the tire/wheel threat zones could be susceptible to damage due to a thrown tire tread or tire burst. This could result in a loss of braking on one MLG truck, loss of nose wheel steering, and loss of directional control on the ground when below rudder effectiveness speed. The Model 787 hydraulic system is configured with a reserve steering system intended to maintain the nose wheel steering function in the event that a thrown tire tread or tire burst leads to a brake system failure such that differential braking cannot be used for directional control. Boeing has determined that damage from a MLG thrown tire tread or tire burst event could also result in the loss of the reserve steering system, resulting in loss of directional control on the ground and consequent runway excursion.

Related Service Information Under 1 CFR Part 51

We reviewed Boeing Alert Service Bulletins B787-81205-SB290032-00 and B787-81205-SB290033-00, both Issue 001, both dated November 17, 2017. This service information describes procedures for installing hydraulic tubing and installing a pressure-operated check valve. These documents are distinct since they apply to different airplane models.

We also reviewed Boeing Alert Service Bulletin B787-81205-SB270039-00, Issue 002, dated March 8, 2018. This service information describes procedures for installing new flight control software.

This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

FAA's Determination

We are proposing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.

Proposed AD Requirements

This proposed AD would require accomplishment of the actions identified as “RC” (required for compliance) in the Accomplishment Instructions of the service information described previously, except for any differences identified as exceptions in the regulatory text of this proposed AD.

For information on the procedures and compliance times, see this service information at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0763.

Difference Between This Proposed AD and the Service Information

This proposed AD would require the software installation specified in Boeing Alert Service Bulletin B787-81205-SB270039-00, Issue 002, dated March 8, 2018, prior to or concurrently with the tubing and valve installation on Model 787-9 airplanes. The effectivity in this service information applies to Model 787-8 and 787-9 airplanes; however, this proposed AD would only require those actions be accomplished on Model 787-9 airplanes.

Possible Additional Rulemaking for Software Installation

We are considering additional rulemaking for Model 787-8 and 787-9 airplanes to require the software installation specified in Boeing Alert Service Bulletin B787-81205-SB270039-00, Issue 002, dated March 8, 2018, within a compliance time that may occur earlier than that for the tubing and valve installation specified in this proposed AD.

Costs of Compliance

We estimate that this proposed AD affects 87 airplanes of U.S. registry. We estimate the following costs to comply with this proposed AD:

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

This proposed AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to transport category airplanes to the Director of the System Oversight Division.

Regulatory Findings

We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify this proposed regulation:

(1) Is not a “significant regulatory action” under Executive Order 12866,

(2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

(3) Will not affect intrastate aviation in Alaska, and

(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

This AD was prompted by a determination that certain areas in the tire/wheel threat zones could be susceptible to damage, which could result in loss of braking on one main landing gear (MLG) truck, loss of nose wheel steering, and loss of directional control on the ground when below rudder effectiveness speed. We are issuing this AD to address damage from a MLG thrown tire tread or tire burst event, which could result in loss of directional control on the ground and consequent runway excursion.

(f) Compliance

Comply with this AD within the compliance times specified, unless already done.

(2) For Model 787-9 airplanes: Prior to or concurrently with accomplishing the actions required by paragraph (g)(1) of this AD, do all applicable actions (including software installation) identified as RC, in accordance with the Accomplishment Instructions of Boeing Alert Service Bulletin B787-81205-SB270039-00, Issue 002, dated March 8, 2018.

(h) Credit for Previous Actions

This paragraph provides credit for the actions specified in paragraph (g)(2) of this AD, if those actions were performed before the effective date of this AD using Boeing Alert Service Bulletin B787-81205-SB270039-00, Issue 001, dated July 31, 2017.

(i) Exception to Service Information

For purposes of determining compliance with the requirements of this AD: Where the service information identified in paragraph (g)(1) of this AD uses the phrase “the Issue 001 date on this service bulletin,” this AD requires using “the effective date of this AD.”

(j) Alternative Methods of Compliance (AMOCs)

(1) The Manager, Seattle ACO Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the certification office, send it to the attention of the person identified in paragraph (k)(1) of this AD. Information may be emailed to: 9-ANM-Seattle-ACO-AMOC-Requests@faa.gov.

(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.

(3) An AMOC that provides an acceptable level of safety may be used for any repair, modification, or alteration required by this AD if it is approved by the Boeing Commercial Airplanes Organization Designation Authorization (ODA) that has been authorized by the Manager, Seattle ACO Branch, FAA, to make those findings. To be approved, the repair method, modification deviation, or alteration deviation must meet the certification basis of the airplane, and the approval must specifically refer to this AD.

(4) For service information that contains steps that are labeled as RC, the provisions of paragraphs (j)(4)(i) and (j)(4)(ii) of this AD apply.

(i) The steps labeled as RC, including substeps under an RC step and any figures identified in an RC step, must be done to comply with the AD. If a step or substep is labeled “RC Exempt,” then the RC requirement is removed from that step or substep. An AMOC is required for any deviations to RC steps, including substeps and identified figures.

(ii) Steps not labeled as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an AMOC, provided the RC steps, including substeps and identified figures, can still be done as specified, and the airplane can be put back in an airworthy condition.

We propose to adopt a new airworthiness directive (AD) for certain Airbus SAS Model A330-200, -200F, and -300 series airplanes. This proposed AD was prompted by a revision of the airworthiness limitations section (ALS), which provides new and more restrictive maintenance requirements and airworthiness limitations for airplane structures and systems. This proposed AD would require revising the maintenance or inspection program to incorporate new maintenance requirements and airworthiness limitations. We are proposing this AD to address the unsafe condition on these products.

DATES:

We must receive comments on this proposed AD by October 15, 2018.

ADDRESSES:

You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:

You may examine the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0788; or in person at Docket Operations between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this NPRM, the regulatory evaluation, any comments received, and other information. The street address for Docket Operations (phone: 800-647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2018-0788; Product Identifier 2018-NM-004-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this NPRM. We will consider all comments received by the closing date and may amend this NPRM because of those comments.

We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this NPRM.

Discussion

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2017-0228, dated November 21, 2017 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Airbus SAS Model A330 and A340 series airplanes. The MCAI states:

The airworthiness limitations are currently defined and published in the Airbus A330 and A340 Airworthiness Limitations Section (ALS) documents. The airworthiness limitations applicable to the System Equipment Maintenance Requirements, which are approved by EASA, are specified in Airbus A330 and A340 ALS Part 4. Failure to comply with these instructions could result in an unsafe condition.

Since this [EASA] AD was issued, Airbus published Revision 06 and Revision 05, respectively, of Airbus A330 and A340 ALS Part 4, which introduce new and more restrictive maintenance requirements and/or airworthiness limitations.

For the reason described above, this [EASA] AD retains the requirements of EASA AD 2016-0011, which is superseded, and requires accomplishment of the actions specified in Airbus A330 ALS Part 4 Revision 06, or A340 ALS Part 4 Revision 05, as applicable.

The unsafe condition is reduced control of the airplane due to the failure of system components.

You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0788.

Relationship Between Proposed AD and AD 2017-05-10

This NPRM would not propose to supersede AD 2017-05-10. Rather, we have determined that a stand-alone AD would be more appropriate to address the changes in the MCAI. This NPRM would require revising the maintenance or inspection program to incorporate new maintenance requirements and airworthiness limitations. Accomplishment of the proposed actions would then terminate all of the requirements of AD 2017-05-10.

Related Service Information Under 1 CFR Part 51

Airbus SAS has issued A330 Airworthiness Limitations Section (ALS) Part 4, System Equipment Maintenance Requirements (SEMR), Revision 06, dated September 18, 2017. This service information describes preventative maintenance requirements and associated airworthiness limitations applicable to aircraft systems susceptible to aging effects. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

FAA's Determination

This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop on other products of the same type design.

Proposed Requirements of This NPRM

This proposed AD would require revising the maintenance or inspection program to incorporate new maintenance requirements and airworthiness limitations.

Differences Between This Proposed AD and the MCAI or Service Information

EASA AD 2017-0228, dated November 21, 2017, specifies that if there are findings from the ALS inspection tasks, corrective actions must be accomplished in accordance with Airbus SAS maintenance documentation. However, this proposed AD does not include that requirement. Operators of U.S.-registered airplanes are required by general airworthiness and operational regulations to perform maintenance using methods that are acceptable to the FAA. We consider those methods to be adequate to address any corrective actions necessitated by the findings of ALS inspections required by this proposed AD.

This proposed AD does not include Model A340 series airplanes in the Applicability. AD 2014-23-17, Amendment 39-18033 (79 FR 71304, December 2, 2014), currently addresses the identified unsafe condition for Model A340 series airplanes. We have also added EASA AD 2017-0228, dated November 21, 2017, to the required airworthiness action list (RAAL) for Model A340 series airplanes.

Airworthiness Limitations Based on Type Design

The FAA recently became aware of an issue related to the applicability of ADs that require incorporation of an ALS revision into an operator's maintenance or inspection program.

Typically, when these types of ADs are issued by civil aviation authorities of other countries, they apply to all airplanes covered under an identified type certificate (TC). The corresponding FAA AD typically retains applicability to all of those airplanes.

In addition, U.S. operators must operate their airplanes in an airworthy condition, in accordance with 14 CFR 91.7(a). Included in this obligation is the requirement to perform any maintenance or inspections specified in the ALS, and in accordance with the ALS as specified in 14 CFR 43.16 and 91.403(c), unless an alternative has been approved by the FAA.

When a TC is issued for a type design, the specific ALS, including revisions, is a part of that type design, as specified in 14 CFR 21.31(c).

The sum effect of these operational and maintenance requirements is an obligation to comply with the ALS defined in the type design referenced in the manufacturer's conformity statement. This obligation may introduce a conflict with an AD that requires a specific ALS revision if new airplanes are delivered with a later revision as part of their type design.

To address this conflict, the FAA has approved alternative methods of compliance (AMOCs) that allow operators to incorporate the most recent ALS revision into their maintenance/inspection programs, in lieu of the ALS revision required by the AD. This eliminates the conflict and enables the operator to comply with both the AD and the type design.

However, compliance with AMOCs is normally optional, and we recently became aware that some operators choose to retain the AD-mandated ALS revision in their fleet-wide maintenance/inspection programs, including those for new airplanes delivered with later ALS revisions, to help standardize the maintenance of the fleet. To ensure that operators comply with the applicable ALS revision for newly delivered airplanes containing a later revision than that specified in an AD, we plan to limit the applicability of ADs that mandate ALS revisions to those airplanes that are subject to an earlier revision of the ALS, either as part of the type design or as mandated by an earlier AD.

This proposed AD therefore would apply to Airbus SAS airplanes identified in paragraph (c) of this proposed AD with an original certificate of airworthiness or original export certificate of airworthiness that was issued on or before the date of the ALS revision identified in this proposed AD. Operators of airplanes with an original certificate of airworthiness or original export certificate of airworthiness issued after that date must comply with the airworthiness limitations specified as part of the approved type design and referenced on the TC data sheet.

Costs of Compliance

We estimate that this proposed AD affects 104 airplanes of U.S. registry.

We have determined that revising the maintenance or inspection program takes an average of 90 work-hours per operator, although we recognize that this number may vary from operator to operator. In the past, we have estimated that this action takes 1 work-hour per airplane. Since operators incorporate maintenance or inspection program changes for their affected fleet(s), we have determined that a per-operator estimate is more accurate than a per-airplane estimate. Therefore, we estimate the total cost per operator to be $7,650 (90 work-hours × $85 per work-hour).

Authority for This Rulemaking

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

This proposed AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to transport category airplanes to the Director of the System Oversight Division.

Regulatory Findings

We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify this proposed regulation:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);

3. Will not affect intrastate aviation in Alaska; and

4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

This AD applies to Airbus SAS Model A330-201, A330-202, A330-203, A330-223, A330-243, A330-223F, A330-243F, A330-301, A330-302, A330-303, A330-321, A330-322, A330-323, A330-341, A330-342, and A330-343 airplanes, certificated in any category, with an original certificate of airworthiness or original export certificate of airworthiness issued on or before September 18, 2017.

This AD was prompted by a revision of the airworthiness limitations section (ALS), which provides new and more restrictive maintenance requirements and airworthiness limitations for airplane structures and systems. We are issuing this AD to prevent reduced airplane control due to the failure of system components.

(f) Compliance

Comply with this AD within the compliance times specified, unless already done.

(g) Maintenance Program Revision

Within 90 days after the effective date of this AD, revise the maintenance or inspection program, as applicable, by incorporating Airbus A330 Airworthiness Limitations Section (ALS) Part 4, System Equipment Maintenance Requirements (SEMR), Revision 06, dated September 18, 2017. The initial compliance times for the actions specified in Airbus A330 Airworthiness Limitations Section (ALS) Part 4, System Equipment Maintenance Requirements (SEMR), Revision 06, dated September 18, 2017, are within the applicable compliance times specified in Airbus A330 Airworthiness Limitations Section (ALS) Part 4, System Equipment Maintenance Requirements (SEMR), Revision 06, dated September 18, 2017, or within 90 days after the effective date of this AD, whichever occurs later, except as required by paragraph (h) of this AD.

(4) The initial compliance time for replacement of the retraction brackets of the main landing gear (MLG) having a part number specified in paragraphs (h)(4)(i) through (h)(4)(xvi) of this AD is before the accumulation of 19,800 total landings on the affected retraction brackets of the MLG, or within 900 flight hours after April 9, 2012 (the effective date of AD 2012-04-07, Amendment 39-16963 (77 FR 12989, March 5, 2012)), whichever occurs later.

After accomplishing the revision required by paragraph (g) of this AD, no alternative actions (e.g., inspections) or intervals may be used unless the actions or intervals are approved as an alternative method of compliance (AMOC) in accordance with the procedures specified in paragraph (k)(1) of this AD.

(j) Terminating Actions for the Requirements of AD 2017-05-10

Accomplishing the actions required by paragraph (g) of this AD terminates all requirements of AD 2017-05-10.

(k) Other FAA AD Provisions

The following provisions also apply to this AD:

(1) Alternative Methods of Compliance (AMOCs): The Manager, International Section, Transport Standards Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the International Section, send it to the attention of the person identified in paragraph (l)(2) of this AD. Information may be emailed to: 9-ANM-116-AMOC-REQUESTS@faa.gov. Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.

(2) Contacting the Manufacturer: For any requirement in this AD to obtain corrective actions from a manufacturer, the action must be accomplished using a method approved by the Manager, International Section, Transport Standards Branch, FAA; or the European Aviation Safety Agency (EASA); or Airbus SAS's EASA Design Organization Approval (DOA). If approved by the DOA, the approval must include the DOA-authorized signature.

(l) Related Information

(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA AD 2017-0228, dated November 21, 2017, for related information. This MCAI may be found in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0788.

We propose to adopt a new airworthiness directive (AD) for all Airbus SAS Model A330-200 Freighter series airplanes, Model A330-200 and -300 series airplanes, and Model A340-200 and -300 series airplanes. This proposed AD was prompted by defects found during production tests of ram air turbine (RAT) units; investigation revealed that the defects were due to certain RAT hydraulic pumps having an alternative manufacturing process of the pump pistons. This proposed AD would require replacing any defective RAT hydraulic pump with a serviceable part and re-identifying the RAT module part number. We are proposing this AD to address the unsafe condition on these products.

DATES:

We must receive comments on this proposed AD by October 15, 2018.

ADDRESSES:

You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:

You may examine the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0764; or in person at Docket Operations between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this NPRM, the regulatory evaluation, any comments received, and other information. The street address for Docket Operations (phone: 800-647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2018-0764; Product Identifier 2018-NM-074-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this NPRM. We will consider all comments received by the closing date and may amend this NPRM because of those comments.

We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this NPRM.

Discussion

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2018-0062, dated March 20, 2018 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Airbus SAS Model A330-200 Freighter series airplanes, Model A330-200 and -300 series airplanes, and Model A340-200 and -300 series airplanes. The MCAI states:

Four A330 RAT units were returned to the supplier due to low discharge pressure. These defects were detected during Airbus production tests. Subsequent investigations by the RAT manufacturer UTAS (formerly Hamilton Sundstrand) revealed that some RAT hydraulic pumps, [part number] P/N 5916430, were involved in an alternative manufacturing process of the pump pistons. This resulted in form deviations (rough surface finish and sharp edges), which caused excessive wear and damage to the bore where the pistons moved.

This condition, if not corrected, could lead to low performance of the pump, possibly resulting in reduced control of the aeroplane, particularly if occurring following a total engine flame out, or during a total loss of normal electrical power generation.

To address this potential unsafe condition, Airbus published [service bulletin] SB A330-29-3130 and SB A340-29-4098, providing instructions for identification and replacement of the affected parts.

For the reasons described above, this [EASA] AD requires replacement of the affected parts. This [EASA] AD also requires re-identification of the RAT module.

You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0764.

Other Related Rulemaking

The FAA issued AD 2016-14-01, Amendment 39-18582 (81 FR 44983, July 12, 2016); corrected (81 FR 51097, August 3, 2016) (“AD 2016-14-01”). AD 2016-14-01 applies to certain Airbus SAS Model A330-200 Freighter series airplanes; Model A330-200 and A330-300 series airplanes; Model A340-200 and A340-300 series airplanes; Model A340-500 series airplanes; and Model A340-600 series airplanes. AD 2016-14-01 requires identification of the manufacturer, part number, and serial number of the RAT, and re-identification and modification of the RAT if necessary. AD 2016-14-01 was prompted by a report indicating that, during an operational test of a RAT, the RAT did not deploy in automatic mode. AD 2016-14-01 was issued to prevent non-deployment of the RAT, which, following a total engine flame-out, or during a total loss of normal electrical power generation, could result in reduced control of the airplane.

Related Service Information Under 1 CFR Part 51

Airbus SAS has issued Service Bulletins A330-29-3130 and A340-29-4098, both dated May 3, 2017. This service information describes procedures for replacing any affected RAT hydraulic pump with a serviceable part and re-identifying the RAT module part number. These documents are distinct since they apply to different airplane models.

UTC Aerospace Systems has issued Service Bulletin ERPS06M-29-22, dated March 17, 2017, and Revision 1, dated June 27, 2017. This service information identifies affected part and serial numbers for the RAT hydraulic pump. These documents are distinct since UTC Aerospace Systems Service Bulletin ERPS06M-29-22, Revision 1, dated June 27, 2017, adds a Parker part number reference to each Hamilton Sundstrand hydraulic part number.

This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

FAA's Determination

This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop on other products of the same type design.

Proposed Requirements of This NPRM

This proposed AD would require accomplishing the actions specified in the service information described previously.

Costs of Compliance

We estimate that this proposed AD affects 103 airplanes of U.S. registry. We estimate the following costs to comply with this proposed AD:

Estimated CostsLabor costParts costCost per productCost on U.S. operatorsUp to 14 work-hours × $85 per hour = Up to $1,190$0Up to $1,190Up to $122,570.Authority for This Rulemaking

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

This proposed AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to transport category airplanes to the Director of the System Oversight Division.

Regulatory Findings

We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify this proposed regulation:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);

3. Will not affect intrastate aviation in Alaska; and

4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

This AD was prompted by defects found during production tests of ram air turbine (RAT) units; investigation revealed that the defects were due to certain RAT hydraulic pumps having an alternative manufacturing process of the pump pistons. We are issuing this AD to prevent low performance of the pump, which, following a total engine flame-out, or during a total loss of normal electrical power generation, could result in reduced control of the airplane.

(f) Compliance

Comply with this AD within the compliance times specified, unless already done.

(g) Definitions for This AD

(1) An affected part is a RAT hydraulic pump having part number (P/N) 5916430 and a serial number identified in UTC Aerospace Systems Service Bulletin ERPS06M-29-22, dated March 17, 2017, or Revision 1, dated June 27, 2017.

(2) A serviceable part is a RAT hydraulic pump identified as acceptable in Airbus Service Bulletin A330-29-3130 or A340-29-4098, both dated May 3, 2017, as applicable.

(3) Group 1 airplanes are airplanes on which an affected part is installed.

(4) Group 2 airplanes are airplanes on which no affected part is installed. A Model A330 airplane on which Airbus SAS Modification 206604 has been embodied in production is a Group 2 airplane, provided that the airplane remains in that configuration.

(h) Replacement and Re-identification for Group 1 Airplanes

(1) Within 18 months after the effective date of this AD; replace any affected RAT hydraulic pump with a serviceable part, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A330-29-3130 or A340-29-4098, both dated May 3, 2017, as applicable.

(2) Concurrently with the replacement required by paragraph (h)(1) of this AD, re-identify the part number of the serviceable RAT module, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A330-29-3130 or A340-29-4098, both dated May 3, 2017, as applicable.

Note 1 to paragraph (h)(2) of this AD: Airbus Service Bulletins A330-29-3130 and A340-29-4098, both dated May 3, 2017, provide guidance for re-identification of the part numbers of the RAT hydraulic pumps that are not affected, and the part numbers of the RAT modules that are not equipped with an affected hydraulic pump.

(i) Compliance With AD 2016-14-01

After re-identification of a RAT module on an airplane, as required by paragraph (h)(2) of this AD, the airplane remains compliant with the RAT module re-identification requirements of AD 2016-14-01 for that airplane.

(j) Parts Installation Prohibition

(1) For Group 1 airplanes: After replacement of any affected RAT hydraulic pump as required by paragraph (h)(1) of this AD, do not install any affected RAT hydraulic pump.

(2) For Group 2 airplanes: As of the effective date of this AD, do not install any affected RAT hydraulic pump.

(k) Other FAA AD Provisions

The following provisions also apply to this AD:

(1) Alternative Methods of Compliance (AMOCs): The Manager, International Section, Transport Standards Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the International Branch, send it to the attention of the person identified in paragraph (l)(2) of this AD. Information may be emailed to: 9-ANM-116-AMOC-REQUESTS@faa.gov. Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.

(2) Contacting the Manufacturer: For any requirement in this AD to obtain corrective actions from a manufacturer, the action must be accomplished using a method approved by the Manager, International Section, Transport Standards Branch, FAA; or The European Aviation Safety Agency (EASA); or Airbus SAS's EASA DOA. If approved by the DOA, the approval must include the DOA-authorized signature.

(l) Related Information

(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA AD 2018-0062, dated March 20, 2018, for related information. This MCAI may be found in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0764.

We propose to supersede Airworthiness Directive (AD) 2016-07-23, which applies to all Airbus SAS Model A318, A319, A320, and A321 series airplanes. AD 2016-07-23 requires, for certain airplanes, repetitive replacements of the fixed fairing upper and lower attachment studs of both the left-hand (LH) and right-hand (RH) main landing gear (MLG); and repetitive inspections for corrosion, wear, fatigue cracking, and loose studs of each forward stud assembly of the fixed fairing door upper and lower forward attachments of both the LH and RH MLG; and replacement if necessary. AD 2016-07-23 also provides an optional terminating modification for the repetitive replacements of the fixed fairing upper and lower attachment studs. Since we issued AD 2016-07-23, we have determined that for some airplane configurations, associated fixed fairing assembly part numbers susceptible to fatigue cracking were not listed in certain service information required by AD 2016-07-23. In addition, we have determined that additional work is necessary to re-identify the fixed fairing assembly part number on certain airplanes. This proposed AD would retain the requirements of AD 2016-07-23 and, for certain airplanes, require re-identification of the LH and RH fixed fairing assemblies' part numbers. We are proposing this AD to address the unsafe condition on these products.

DATES:

We must receive comments on this proposed AD by October 15, 2018.

ADDRESSES:

You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:

You may examine the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0762; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this NPRM, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone 800-647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2018-0762; Product Identifier 2018-NM-033-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD based on those comments.

We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this proposed AD.

Discussion

We issued AD 2016-07-23, Amendment 39-18468 (81 FR 26115, May 2, 2016) (“AD 2016-07-23”), for all Airbus SAS Model A318, A319, A320, and A321 series airplanes. AD 2016-07-23 requires, for certain airplanes, repetitive replacements of the fixed fairing upper and lower attachment studs of both the LH and RH MLG; and repetitive inspections for corrosion, wear, fatigue cracking, and loose studs of each forward stud assembly of the fixed fairing door upper and lower forward attachment of both the LH and RH MLG; and replacement if necessary. AD 2016-07-23 also provides an optional terminating modification for the repetitive replacements of the fixed fairing upper and lower attachment studs. AD 2016-07-23 resulted from reports of in-flight loss of fixed and hinged MLG fairings, and reports of post-modification MLG fixed fairing assemblies that have wear and corrosion. We issued AD 2016-07-23 to address in-flight detachment of an MLG fixed fairing and consequent damage to the airplane.

Actions Since AD 2016-07-23 Was Issued

Since we issued AD 2016-07-23, we have determined that for some airplane configurations, associated fixed fairing assembly part numbers susceptible to fatigue cracking were not listed in certain service information required by AD 2016-07-23. In addition, we have determined that additional work is necessary to re-identify the fixed fairing assembly part number after completion of the optional terminating modification. This proposed AD would retain the requirements of AD 2016-07-23 and require re-identification of the part number of the LH and RH fixed fairing assemblies after completion of the optional terminating modification.

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2018-0023, dated January 26, 2018; corrected February 5, 2018 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Airbus SAS Model A318 and A319 series airplanes; all Airbus SAS Model A320-211, A320-212, A320-214, A320-216, A320-231, A320-232, and A320-233 airplanes; and all Airbus SAS Model A321-111, A321-112, A321-131, A321-211, A321-212, A321-213, A321-231 and A321-232 airplanes. The MCAI states:

Several occurrences were reported of in-flight loss of main landing gear (MLG) fixed and hinged fairings. The majority of reported events occurred following scheduled maintenance activities. One result of the investigation was that a discrepancy between the drawing and the maintenance manuals was discovered. The maintenance documents were corrected to prevent mis-rigging of the MLG fixed and hinged fairings, which could induce fatigue cracking.

Prompted by these findings, Airbus issued Service Bulletin (SB) A320-52-1083, providing instructions for a one-time inspection of the MLG fixed fairing composite insert and the surrounding area, replacement of the adjustment studs at the lower forward position and adjustment to the new clearance tolerances. That SB was replaced by Airbus SB A320-52-1100 (modification (mod) 27716) introducing a re-designed location stud, rod end and location plate at the forward upper and lower leg fixed-fairing positions. Subsequently, reports were received of post-mod 27716/post-SB A320-52-1100 MLG fixed fairing assemblies with corrosion, which could also induce cracking.

This condition, if not detected and corrected, could lead to further cases of in-flight detachment of a MLG fixed fairing, possibly resulting in injury to persons on the ground and/or damage to the aeroplane.

Since EASA AD 2014-0096 was issued, Airbus developed an alternative inspection programme to meet the [EASA] AD requirements. In addition, a terminating action (mod 155648) was developed, which was made available for in-service aeroplanes through Airbus SB A320-52-1165.

Consequently, EASA issued AD 2015-0001 (later revised), retaining the requirements of EASA AD 2014-0096, which was superseded, and adding an optional terminating action for the repetitive inspections. For post-mod aeroplanes, i.e. incorporating Airbus mod 155648 in production, or modified by Airbus SB A320-52-1165 in service, the only remaining requirement was to ensure that pre-mod components are no longer installed.

Since EASA AD 2015-0001R1 [which corresponds to FAA AD 2016-07-23] was issued, Airbus revised SB A320-52-1165 to include additional work, to re-identify the fairing assembly part number (P/N). During the preparation of this additional work, it was noted that several configurations and associated P/N were not listed in the original SB, which may have an impact on aeroplanes on which SB A320-52-1165 original issue or Revision (rev.) 01 was already accomplished. It has also been noticed that the instructions for reidentification of two P/N were not correct in revision 02 of this SB.

For the reasons described above, this [EASA] AD retains the requirement of EASA AD 2015-0001R1, which is superseded, but requires using the SB at rev. 03.

This [EASA] AD also requires accomplishment of additional work [re-identification of the part number for the LH and RH fixed fairing assemblies] for those aeroplanes on which parts were replaced in accordance with the instructions of Airbus SB A320-52-1165 at original issue, rev. 01 or rev. 02 and correct (re)identification as applicable.

You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0762.

Related Service Information Under 1 CFR Part 51

Airbus SAS has issued the following service information.

• Airbus Service Bulletin A320-52-1100, Revision 01, dated March 12, 1999. This service information describes procedures for modification of the airplane to post-Airbus Modification 27716 configuration (by replacing the location stud, rod end, and location plate at the forward upper and lower leg fixed-fairing positions of the MLG door assemblies). The modification includes a resonance frequency inspection for debonding of the composite insert and delamination of the honeycomb area around the insert, and applicable corrective actions. Corrective actions include repairing the insert. The actions in this service information are an optional terminating modification.

• Airbus Service Bulletin A320-52-1163, Revision 01, including Appendix 01, dated June 22, 2015. This service information describes procedures for inspection of the fixed fairing door upper and lower forward attachments of the LH and RH MLG, and replacement of the fixed fairing upper and lower attachment studs of the LH and RH MLG.

• Airbus Service Bulletin A320-52-1165, Revision 03, excluding Appendix 01 and including Appendix 02, dated November 9, 2017. The service information describes procedures for replacing the fixed fairing attachment stud assemblies of the MLG door assembly with new assemblies, and re-identifying the part number of the LH and RH MLG fixed fairing assemblies. The actions in this service information are an optional terminating modification.

The service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

FAA's Determination

This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all pertinent information and determined an unsafe condition exists and is likely to exist or develop on other products of the same type design.

Proposed Requirements of This NPRM

This proposed AD would retain all of the requirements of AD 2016-07-23. This proposed AD would require accomplishing the actions specified in the service information described previously.

Costs of Compliance

We estimate that this proposed AD affects 901 airplanes of U.S. registry. We estimate the following costs to comply with this proposed AD:

We estimate the following costs to do any necessary replacements or re-identifications that would be required based on the results of the inspection. We have no way of determining the number of aircraft that might need these replacements or re-identifications:

According to the manufacturer, some or all of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all costs in our cost estimate.

Authority for This Rulemaking

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

This proposed AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to transport category airplanes to the Director of the System Oversight Division.

Regulatory Findings

We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify this proposed regulation:

1. Is not a “significant regulatory action” under Executive Order 12866,

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

3. Will not affect intrastate aviation in Alaska, and

4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

This AD was prompted by reports of in-flight loss of fixed and hinged main landing gear (MLG) fairings, and reports of post-modification MLG fixed fairing assemblies that have wear and corrosion. This AD was also prompted by a determination that for some airplane configurations, associated fixed fairing assembly part numbers susceptible to fatigue cracking were not listed in certain service information required by AD 2016-07-23. In addition, we have determined that additional work is necessary to re-identify the fixed fairing assembly part number on certain airplanes. We are issuing this AD to prevent in-flight detachment of an MLG fixed fairing and consequent damage to the airplane.

(f) Compliance

Comply with this AD within the compliance times specified, unless already done.

(g) Retained Repetitive Replacements, With No Changes

This paragraph restates the requirements of paragraph (g) of AD 2016-07-23, with no changes. For airplanes in pre-Airbus Modification 27716 and pre-Airbus Service Bulletin A320-52-1100 configuration, with any of the components installed that are identified in paragraphs (g)(1) through (g)(5) of this AD: At the applicable compliance time specified in paragraph (h) of this AD, replace fixed fairing upper and lower attachment studs of both left-hand (LH) and right-hand (RH) MLG, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-52-1163, Revision 01, including Appendix 01, dated June 22, 2015. Repeat the replacements thereafter at intervals not to exceed 6,500 flight cycles.

(1) Plate—support having part number (P/N) D5284024820000.

(2) Plate—support having P/N D5284024820200.

(3) Stud—adjustment having P/N D5284024420000.

(4) Rod end assembly (lower) having P/N D5284000500000.

(5) Rod end assembly (upper) having P/N D5284000600000.

(h) Retained Compliance Times for the Requirements of Paragraph (g) of This AD, With No Changes

This paragraph restates the requirements of paragraph (h) of AD 2016-07-23, with no changes. For airplanes identified in paragraph (g) of this AD, except as provided by paragraph (o) of this AD: Do the initial replacement required by paragraph (g) of this AD at the latest of the times specified in paragraphs (h)(1) through (h)(4) of this AD.

(1) Before the accumulation of 6,500 total flight cycles since the airplane's first flight.

(2) Within 6,500 flight cycles since the last installation of a pre-Airbus Modification 27716 stud on the airplane.

(3) Within 1,500 flight cycles after June 6, 2016 (the effective date of AD 2016-07-23).

(4) Within 8 months after June 6, 2016 (the effective date of AD 2016-07-23).

(i) Retained Repetitive Inspections, With No Changes

This paragraph restates the requirements of paragraph (i) of AD 2016-07-23, with no changes. For airplanes in post-Airbus Modification 27716 or post-Airbus Service Bulletin A320-52-1100 configuration, with any of the components installed that are identified in paragraphs (i)(1), (i)(2), and (i)(3) of this AD: At the applicable compliance time specified in paragraph (j) of this AD, do a detailed inspection of the LH and RH MLG forward stud assemblies of the fixed fairing door upper and lower forward attachments of both LH and RH MLG for indications of corrosion, wear, fatigue cracking, and loose studs, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-52-1163, Revision 01, including Appendix 01, dated June 22, 2015. Repeat the detailed inspection thereafter at intervals not to exceed 12 months. Replacement of both LH and RH MLG forward stud assemblies on an airplane, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-52-1163, Revision 01, including Appendix 01, dated June 22, 2015, extends the interval for the next detailed inspection to 72 months; and the inspection must be repeated thereafter at intervals not to exceed 12 months.

(1) Stud—adjustment having P/N D5285600720000.

(2) Rod end assembly (lower) having P/N D5285600400000.

(3) Rod end assembly (upper) having P/N D5285600500000.

(j) Retained Compliance Times for the Requirements of Paragraph (i) of This AD, With No Changes

This paragraph restates the requirements of paragraph (j) of AD 2016-07-23, with no changes. For airplanes identified in paragraph (i) of this AD, except as provided by paragraph (o) of this AD: Do the initial inspection required by paragraph (i) of this AD at the latest of the times specified in paragraphs (j)(1) through (j)(4) of this AD.

(1) Before the accumulation of 72 months since the airplane's first flight.

(2) Within 72 months since the last installation of a post-Airbus Modification 27716 assembly or since accomplishment of the actions specified in Airbus Service Bulletin A320-52-1100.

(3) Within 1,500 flight cycles after June 6, 2016 (the effective date of AD 2016-07-23).

(4) Within 8 months after June 6, 2016 (the effective date of AD 2016-07-23).

(k) Retained Corrective Action, With Revised Service Information

This paragraph restates the requirements of paragraph (k) of AD 2016-07-23, with revised service information. If any discrepancy (including any indication of corrosion, wear, fatigue cracking, or loose studs) of any MLG forward stud assembly is found during any inspection required by paragraph (i) of this AD, except as specified in paragraph (l) of this AD: Before further flight, replace the discrepant upper and lower fixed fairing forward stud assemblies of the LH and RH MLG, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-52-1163, Revision 01, including Appendix 01, dated June 22, 2015; or Airbus Service Bulletin A320-52-1165, Revision 01, dated October 23, 2015, excluding Appendix 01, dated November 3, 2014, and including Appendix 02, dated October 23, 2015; or Airbus Service Bulletin A320-52-1165, Revision 03, excluding Appendix 01 and including Appendix 02, dated November 9, 2017. As of the effective date of this AD only Airbus Service Bulletin A320-52-1163, Revision 01, including Appendix 01, dated June 22, 2015; or Airbus Service Bulletin A320-52-1165, Revision 03, excluding Appendix 01 and including Appendix 02, dated November 9, 2017, may be used.

This paragraph restates the requirements of paragraph (l) of AD 2016-07-23, with revised service information. If any corrosion is found during any inspection required by paragraph (i) of this AD on any MLG fixed fairing forward stud assembly (upper, lower, LH or RH), but the corroded stud is not loose: Do the action specified in paragraph (l)(1) or (l)(2) of this AD.

(1) Before further flight, replace the affected assembly, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-52-1163, Revision 01, including Appendix 01, dated June 22, 2015; or Airbus Service Bulletin A320-52-1165, Revision 01, dated October 23, 2015, excluding Appendix 01, dated November 3, 2014, and including Appendix 02, dated October 23, 2015; or Airbus Service Bulletin A320-52-1165, Revision 03, excluding Appendix 01 and including Appendix 02, dated November 9, 2017. As of the effective date of this AD only Airbus Service Bulletin A320-52-1163, Revision 01, including Appendix 01, dated June 22, 2015; or Airbus Service Bulletin A320-52-1165, Revision 03, excluding Appendix 01 and including Appendix 02, dated November 9, 2017, may be used.

(2) Within 4 months after finding corrosion, and thereafter at intervals not to exceed 4 months, do a detailed inspection for indications of corrosion, wear, fatigue cracking, and loose studs of the forward stud assembly of the affected (LH or RH) MLG, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-52-1163, Revision 01, including Appendix 01, dated June 22, 2015.

(m) Retained Corrective Action for Inspections Specified in Paragraph (l)(2) of This AD, With Revised Service Information

This paragraph restates the requirements of paragraph (m) of AD 2016-07-23, with revised service information. If any indication of wear, fatigue cracking, or loose studs of any forward stud assembly is found during any inspection required by paragraph (l)(2) of this AD: Before further flight, replace the affected (LH or RH) MLG fixed fairing forward stud assembly, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-52-1163, Revision 01, including Appendix 01, dated June 22, 2015; or Airbus Service Bulletin A320-52-1165, Revision 01, dated October 23, 2015, excluding Appendix 01, dated November 3, 2014, and including Appendix 02, dated October 23, 2015; or Airbus Service Bulletin A320-52-1165, Revision 03, excluding Appendix 01 and including Appendix 02, dated November 9, 2017. As of the effective date of this AD only Airbus Service Bulletin A320-52-1163, Revision 01, including Appendix 01, dated June 22, 2015; or Airbus Service Bulletin A320-52-1165, Revision 03, excluding Appendix 01 and including Appendix 02, dated November 9, 2017, may be used.

(n) Retained Terminating Action, With Revised Service Information

This paragraph restates the requirements of paragraph (n) of AD 2016-07-23, with revised service information.

(1) Replacement of parts on an airplane, as required by paragraph (g), (k), (l)(1), or (m) of this AD, does not constitute terminating action for the repetitive inspections required by paragraph (i) of this AD, except as specified in paragraph (n)(3) of this AD.

(2) The repetitive replacements required by paragraph (g) of this AD may be terminated by modification of the airplane to post-Airbus Modification 27716 configuration, including a resonance frequency inspection for debonding of the composite insert and delamination of the honeycomb area around the insert, and all applicable corrective actions, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-52-1100, Revision 01, dated March 12, 1999, provided all applicable corrective actions are done before further flight. Thereafter, refer to paragraph (i) of this AD to determine the compliance time for the next detailed inspection required by this AD.

(3) Modification of an airplane, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-52-1165, Revision 01, dated October 23, 2015, excluding Appendix 01, dated November 3, 2014, and including Appendix 02, dated October 23, 2015; or Airbus Service Bulletin A320-52-1165, Revision 03, excluding Appendix 01 and including Appendix 02, dated November 9, 2017, constitutes terminating action for actions required by paragraphs (g) through (m) of this AD for the airplane on which the modification is done. As of the effective date of this AD only Airbus Service Bulletin A320-52-1165, Revision 03, excluding Appendix 01 and including Appendix 02, dated November 9, 2017, may be used.

(o) Retained Exceptions to Certain AD Actions, With No Changes

This paragraph restates the requirements of paragraph (o) of AD 2016-07-23, with no changes. An airplane on which Airbus Modification 155648 has been embodied in production is not affected by the requirements of paragraphs (g) and (i) of this AD, provided that no affected component, identified by part number as specified in paragraphs (g)(1) through (g)(5) and (i)(1) through (i)(3) of this AD, has been installed on that airplane since first flight of the airplane.

(p) Retained Parts Installation Prohibition, With No Changes

This paragraph restates the requirements of paragraph (p) of AD 2016-07-23, with no changes.

(1) For airplanes in pre-Airbus Modification 27716 or pre-Airbus Service Bulletin A320-52-1100 configuration: No person may install a component identified in paragraphs (g)(1) through (g)(5) of this AD on any airplane after doing the actions provided in paragraph (n)(2) of this AD.

(2) For airplanes in post-Airbus Modification 27716 or post Airbus Service Bulletin A320-52-1100 configuration: As of the effective date of this AD, no person may install a component identified in paragraphs (g)(1) through (g)(5) of this AD on any airplane.

(3) For airplanes in pre-Airbus Modification 155648 or pre-Airbus Service Bulletin A320-52-1165 configuration: No person may install a component identified in paragraphs (g)(1) through (g)(5) and (i)(1) through (i)(3) of this AD on any airplane after doing the actions provided in paragraph (n)(3) of this AD.

(4) For airplanes in post-Airbus Modification 155648 or post-Airbus Service Bulletin A320-52-1165 configuration: As of the effective date of this AD, no person may install a component identified in (g)(1) through (g)(5) and (i)(1) through (i)(3) of this AD on any airplane.

(q) Retained No Reporting Requirement, With No Changes

This paragraph restates the requirements of paragraph (q) of AD 2016-07-23, with no changes. Although Airbus Service Bulletin A320-52-1163, Revision 01, including Appendix 01, dated June 22, 2015, specifies to submit certain information to the manufacturer, and specifies that action as “RC” (Required for Compliance), this AD does not include that requirement.

(r) New Requirement of This AD: Additional Work

For any airplane on which, before the effective date of this AD, any part was installed or replaced, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-52-1165, dated November 3, 2014; Revision 01, dated October 13, 2015; or Revision 02, dated February 12, 2016: Within 12 months after the effective date of this AD, accomplish the instructions identified as “additional work” in the Accomplishment Instructions of Airbus Service Bulletin A320-52-1165, Revision 03, excluding Appendix 01 and including Appendix 02, dated November 9, 2017, as applicable to the airplane configuration.

(s) New Terminating Action

Modification of an airplane in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-52-1165, Revision 03, excluding Appendix 01 and including Appendix 02, dated November 9, 2017, or as specified in paragraph (r) of this AD constitutes terminating action for the requirements of paragraphs (g), (i), (k), (l), and (m) of this AD for that airplane.

(t) New Parts Installation Prohibition

(1) Do not install on any airplane a component specified in paragraphs (g)(1) through (g)(5) of this AD, as required by paragraph (t)(1)(i) or (t)(1)(ii) of this AD, as applicable.

(i) For airplanes in pre-Airbus Modification 27716 or pre-Airbus Service Bulletin A320-52-1100 configuration: After completing the optional modification specified in paragraph (n)(2) of this AD.

(ii) For airplanes in post-Airbus Modification 27716 or post Airbus Service Bulletin A320-52-1100 configuration: As of the effective date of this AD.

(2) Do not install on any airplane a component specified in paragraphs (g)(1) through (g)(5) of this AD or paragraphs (i)(1) through (i)(3) of this AD, as required by paragraph (t)(2)(i) or (t)(2)(ii) of this AD, as applicable.

(i) For airplanes in pre-Airbus Modification 155648 or pre-Airbus Service Bulletin A320-52-1165, Revision 03, excluding Appendix 01 and including Appendix 02, dated November 9, 2017, configuration: After completion of the additional work required by paragraph (r) of this AD.

(ii) For airplanes in post-Airbus Modification 155648 or post-Airbus Service Bulletin A320-52-1165, Revision 03, excluding Appendix 01 and including Appendix 02, dated November 9, 2017, configuration: As of the effective date of this AD.

(u) Credit for Previous Actions

(1) This paragraph provides credit for optional actions provided by paragraph (n)(2) of this AD, if those actions were performed before the effective date of this AD using Airbus Service Bulletin A320-52-1100, dated December 7, 1998.

(2) This paragraph provides credit for the actions required by paragraphs (g), (i), (k), (l), and (m) of this AD, if those actions were performed before the effective date of this AD using Airbus Service Bulletin A320-52-1163, dated February 4, 2014.

(3) This paragraph provides credit for the actions required by paragraphs (k), (l)(1), (m), and (n)(3) of this AD if those actions were performed before the effective date of this AD using Airbus Service Bulletin A320-52-1165, Revision 01, dated October 23, 2015, excluding Appendix 01, dated November 3, 2014, and including Appendix 02, dated October 23, 2015.

(v) Other FAA AD Provisions

(1) Alternative Methods of Compliance (AMOCs): The Manager, International Section, Transport Standards Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the International Section, send it to the attention of the person identified in paragraph (w)(2) of this AD. Information may be emailed to: 9-ANM-116-AMOC-REQUESTS@faa.gov.

(i) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.

(ii) AMOCs approved previously for AD 2016-07-23 are approved as AMOCs for the corresponding provisions of this AD.

(2) Contacting the Manufacturer: As of the effective date of this AD, for any requirement in this AD to obtain corrective actions from a manufacturer, the action must be accomplished using a method approved by the Manager, International Section, Transport Standards Branch, FAA; or the European Aviation Safety Agency (EASA); or Airbus SAS's EASA Design Organization Approval (DOA). If approved by the DOA, the approval must include the DOA-authorized signature.

(3) Required for Compliance (RC): Except as specified by paragraph (q) of this AD: If any service information contains procedures or tests that are identified as RC, those procedures and tests must be done to comply with this AD; any procedures or tests that are not identified as RC are recommended. Those procedures and tests that are not identified as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an AMOC, provided the procedures and tests identified as RC can be done and the airplane can be put back in an airworthy condition. Any substitutions or changes to procedures or tests identified as RC require approval of an AMOC.

(w) Related Information

(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA AD 2018-0023, dated January 26, 2018; corrected February 5, 2018; for related information. This MCAI may be found in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0762.

The Federal Energy Regulatory Commission (Commission) is proposing to amend its regulations to incorporate by reference, with certain enumerated exceptions, the latest version (Version 3.1) of business practice standards adopted by the Wholesale Gas Quadrant of the North American Energy Standards Board (NAESB) applicable to natural gas pipelines in place of the currently incorporated version (Version 3.0) of those business practice standards.

DATES:

Comments are due October 1, 2018.

ADDRESSES:

Comments, identified by the docket number of this proceeding, may be filed electronically at http://www.ferc.gov in acceptable native applications and print-to-PDF, but not in scanned or picture format. For those unable to file electronically, comments may be filed by mail or hand-delivery to: Federal Energy Regulatory Commission, Secretary of the Commission, 888 First Street NE, Washington, DC 20426. The Comment Procedures Section of this document contains more detailed filing procedures.

1. The Federal Energy Regulatory Commission (Commission) proposes to amend its regulations at 18 CFR 284.12 to incorporate by reference, with certain enumerated exceptions,1 the latest version (Version 3.1) of business practice standards adopted by the NAESB Wholesale Gas Quadrant (WGQ) applicable to natural gas pipelines that NAESB reported to the Commission on September 29, 2017 in place of the currently incorporated version (Version 3.0) of those business practice standards. The implementation of these standards and regulations will promote the additional efficiency and reliability of the natural gas industries' operations thereby helping the Commission to carry out its responsibilities under the Natural Gas Act. In addition, the proposed revisions are necessary to establish more efficient coordination between the natural gas and electric industries. Requiring such information ensures both a common means of communication and common business practices to limit miscommunication for participants engaged in the sale of electric energy at wholesale and the transportation of natural gas.

1 As explained below, in section II.B.1, the Commission is not proposing in this proposed rule to incorporate by reference the optional model contracts and the eTariff-related standards included in the North American Energy Standards Board (NAESB) Wholesale Gas Quadrant (WGQ) Version 3.1 package of business practice standards.

I. Background

2. Since 1996, the Commission has adopted regulations to standardize the business practices and communication methodologies of interstate natural gas pipelines to create a more integrated and efficient pipeline grid. These regulations have been promulgated in the Order No. 587 series of orders,2 wherein the Commission has incorporated by reference standards for interstate natural gas pipeline business practices and electronic communications that were developed and adopted by NAESB's WGQ. Upon incorporation by reference, this version of the standards will replace the currently incorporated version (Version 3.0) of those business practice standards, will become part of the Commission's regulations, and compliance by interstate natural gas pipelines will become mandatory.

2 This series of orders began with the Commission's issuance of Standards for Business Practices of Interstate Natural Gas Pipelines, Order No. 587, FERC Stats. & Regs. ¶ 31,038 (1996).

3. On September 29, 2017, NAESB filed a report informing the Commission that it had adopted and ratified WGQ Version 3.1 of its business practice standards applicable to natural gas pipelines. The NAESB report identifies all the changes made to the Version 3.0 Standards and summarizes the deliberations that led to the changes being made. It also identifies changes to the existing standards that were considered but not adopted due to a lack of consensus or other reasons.

II. Discussion

4. In this NOPR, the Commission proposes to incorporate by reference, in its regulations, Version 3.1 of the NAESB WGQ consensus business practice standards, with certain exceptions.3 We propose that any compliance filings made in accordance with a final rule on this subject be made 90 days after issuance of any final rule in this proceeding or on the first business day thereafter if falling on a weekend or holiday. This will allow time for the Commission to process the compliance filings before the effective date of the new standards.4

3 In the discussion below we identify the NAESB WGQ Version 3.1 Standards that we propose not to incorporate by reference.

4See supra P 21, where we propose that compliance with the new standards will be required beginning on the first business day of the month after the fourth full month following issuance of a final rule in this proceeding.

5. As the Commission found in Order No. 587, adoption of consensus standards is appropriate, because the consensus process helps ensure the reasonableness of the standards by requiring that the standards draw support from a broad spectrum of industry participants representing all segments of the industry. Moreover, because the industry conducts business under these standards, the Commission's regulations should reflect those standards that have the widest possible support. In section 12(d) of the National Technology Transfer and Advancement Act of 1995, Congress affirmatively requires federal agencies to use technical standards developed by voluntary consensus standards organizations, like NAESB, as a means to carry out policy objectives or activities.

6. We discuss below some specific aspects of NAESB's filing.

A. Modifications to Previous Version of Standards

7. NAESB adopted two substantive revisions concerning the Nominations Related Standards, which govern shipper requests to schedule service on natural gas pipelines. One revision revises Standard 1.3.82 to establish a standard rounding process (requiring calculations to at least the seventh decimal place) for elapsed-prorated-scheduled quantity 5 calculations to provide for needed numerical uniformity and granularity for users of these NAESB procedures. The other Nomination Related Standards revision was to revise the “Service Requester” element of Standard 1.3.27,6 which specifies some of the information that should be included in a nomination request, from a Mandatory designation to a Business Conditional 7 designation. Thus, instead of forcing a specific upstream or downstream (unthreaded) nomination 8 to be tied to a specific contract (using a specific threaded nomination), upstream nominations may now be distributed among several contracts (using a Pathed Non-Threaded nomination structure), which generally increases flexibility to customers.

That portion of the scheduled quantity that would have theoretically flowed up to the effective time of the intraday nomination being confirmed, based upon a cumulative uniform hourly quantity for each nomination period affected.

6 NAESB also made conforming revisions to the related data sets and documents: Standard 1.4.1 of the Nomination data set, Standard 1.4.5 of the Scheduled Quantity data set, Standard 2.4.4 of the Shipper Imbalance data set, Standard 1.4.2 of the Nomination Quick Response data set, Standard 2.4.1 of the Pre-Determined Allocation document and Standard 2.4.3 of the Allocation document.

7 Standard 1.2.2 of the Nominations Related Standards provides that a Business Conditional data element is one that is based on current variations in business practice.

8 NAESB's Nomination Data Dictionary, WGQ Version 3.1, Standard 1.4.1, retains from the Version 3.0 standard the field for “Model Type Data” that identifies which of three types of nomination structures is being used. These are: Pathed, Non-Pathed and Pathed Non-Threaded. Having these three types of model type data allows specificity as to the details of the nomination. A pathed nomination uses one nomination line item to transact business and, therefore, has one transaction type. A non-pathed nomination uses two nomination line items to transact business and, therefore, has two transaction types. A pathed non-threaded nomination uses three nomination line items to transact business and has three transaction types.

NAESB also provides the following further clarification of these concepts in the description of the technical implementation of business processes included as part of Standard 1.4.1, where NAESB explains that:

[a] “Pathed” nomination is actually a “Pathed Threaded” nomination because (1) the physical path of the pipeline locations and service contract(s) is fully described in the nomination, and (2) the logical thread of a specific supplier entity to a specific market entity at specific pipeline locations for a specific quantity is also fully described. “Non-Pathed” nominations are actually “Non-Pathed Non-Threaded” nominations because (1) physical “location location-to to-location” paths are not described in the nominations, and (2) no ties of specific supply entities to specific market entities are established. And for “Pathed Non-Threaded” nominations, (1) the physical path of the pipeline locations, service contract(s), and quantity is fully described, and (2) no ties of specific supply entities to specific market entities are established. See NAESB WGQ Version 3.1 Business Practice Standards, Nominations Related Standards, Standard 1.4.1, at 87 (Sep. 29, 2017).

8. NAESB also adopted three revisions to the WGQ Electronic Delivery Mechanism Standards, which establish the framework for the electronic dissemination and communication of information between parties in the North American Wholesale Gas marketplace. First, NAESB revised Standard 4.3.80 to increase the allowable field length in ASCII Comma Separated Value Files to 3000 characters because that increases the amount of information that can be conveyed, but reasonably limits it in conformity with commonly used software such as Excel. Second, NAESB adopted new Standard 4.3.106 to allow checkboxes and radio buttons in the Transmission Service Providers' Electronic Bulletin Boards (EBBs) to indicate “Yes” and/or “No” responses to data elements, which is more convenient than the current drop down list. Third, NAESB modified its standards to update the operating systems and web browsers that entities should support to allow users to take advantage of recent developments in computer technology and use. Additionally, language was added to clarify the Secure Sockets Layer/Transport Layer Security protocols, which encrypt data to hide information from electronic observers on the internet. The new standard provides guidance on the timing for adoption of a new version of Secure Sockets Layer/Transport Layer Security protocols—new versions of these protocols should be used within 9 months of the version becoming generally available. In addition, the new standard clarifies that Secure Sockets Layer is a colloquial term that encompasses both Secure Sockets Layer and Transport Layer Security.

9. Other changes adopted by NAESB included changes to the NAESB WGQ data sets and other technical implementation documentation, which provide the technological support necessary to use the NAESB standards effectively. One such change was to add a new Business Conditional data element “Agent” and corresponding technical implementation to the Nomination data set Standard 1.4.1 and the Scheduled Quantity data set Standard 1.4.5. Currently, in the data sets, the Service Requester is defined as the Shipper or their Agent; however, language included in the implementation guides states that both the Shipper and Agent will be identified. Thus, this change adds a data element “Agent” to the data sets to allow the Service Requestor to identify both the shipper and its agent if it uses an agent to nominate and schedule on the pipeline.

10. NAESB also adopted revisions to the Flowing Gas Related data sets and technical implementation, which address quantitative issues relating generally to allocation, imbalances and measurement of flowing gas. Specifically, NAESB added three Business Conditional data elements to the Authorization to Post Imbalances data set (Standard 2.4.9). The addition of the three data elements will allow a Service Requester to authorize specific contracts and quantities of imbalances for specified periods of time to be posted.

11. In addition, NAESB revised the Imbalance Trade data set (Standard 2.4.11) to reinstate language providing the confirming party the ability to reject a trade in the Imbalance Trade data set when an auto-confirm agreement with a confirming party is in place. NAESB states that in its WGQ Version 2.1 publication, before the Imbalance Trading data sets were consolidated, the Imbalance Trade Confirmation contained a Yes/No indicator that the confirming party could use to indicate its acceptance or rejection of the trade. This indicator informed a pipeline whether the confirming party agreed to the terms of the trade that the initiating trader had posted. When the data sets were consolidated, this data element was dropped because it was assumed that if a confirming party did not agree with the posted terms it would not confirm the trade, which was effective only if the pipeline did not have an auto-confirm agreement with that confirming party. Accordingly, to address situations where there are auto-confirm agreements, NAESB has now revised Standard 2.4.11 to add a new Business Conditional data element “Imbalance Trade Response” with an “Accept/Reject” code value. This Accept/Reject indicator informs the pipeline whether the confirming party agrees to the terms of the trade that the initiating trader had posted.

12. NAESB also revised Standard 2.4.6 to add two Senders Option data elements,9 “Comments” and “Volume-Uncorrected” to the Measured Volume Audit Statement 10 in order to communicate raw data on volumes in addition to the final volumes which are communicated through the existing data element “Volume Corrected.” Thus, users will now be able to indicate what initial data they received in addition to how that data was ultimately corrected, and to provide comments concerning that data, which relate to what meter was used to measure the data.

9 Nominations Standard 1.2.2 provides that Sender's Option means that this element is an option for the sender to send and, if sent, the receiver should store and use the contents of the data element.

10 NAESB's business process and practices overview of the Flowing Gas Standards states that the Measured Volume Audit Statement data set is used to report gas measurement information in support of the allocation, imbalance, invoice and audit processes.

13. NAESB also adopted revisions to the Capacity Release Related data sets and technical implementation. Specifically, NAESB revised Standard 5.4.24 to add a new Business Conditional data element, “Waive Bidder Credit Indicator” and corresponding code values to the Offer data set. The additional data element indicates to a Bidder whether the Releasing Shipper will waive, pursuant to the Transmission Service Provider's tariff, the Bidder's creditworthiness pre-qualification.

14. Further, NAESB revised Standard 6.3.1 (i.e., the NAESB Base Contract for Sale and Purchase of Natural Gas) to add language to the disclaimer to provide a copyright notification and direct the reader to the NAESB Copyright Policy and Companies with Access to NAESB Standards under the Copyright Policy posted on the NAESB website. Identical language was added to three additional NAESB WGQ Contracts.

15. Lastly, NAESB adopted modifications to the cover page of Standard 6.3.1 to add a self-identification provision that assists end users in determining whether counterparties are commercial market participants as defined by the United States Commodity Futures Trading Commission.

B. Standards Proposed Not To Be Incorporated by Reference

16. The Commission proposes to continue its past practice 11 of not incorporating by reference into its regulations any optional model contracts, because the Commission does not require the use of these contracts.12 In addition, consistent with our findings in past proceedings, the Commission is not proposing to incorporate by reference the Wholesale Electric Quadrant/WGQ eTariff Related Standards, because the Commission has already adopted standards and protocols for electronic tariff filings based on the NAESB Standards.13

17. The Commission is proposing to continue the compliance filing requirements as revised in Order No. 587-V.14 This would require compliance with the NAESB WGQ Version 3.1 standards on the first business day of the month after the fourth full month following issuance of a final rule in this proceeding. As the Commission found in Order No. 587-V, adoption of the revised compliance filing requirements increases the transparency of the pipelines' incorporation by reference of the NAESB WGQ Standards so that shippers and the Commission will know which tariff provision(s) implements each standard as well as the status of each standard.15 Likewise, consistent with past practice, the Commission will post on its eLibrary website (under Docket No. RM96-1-041) a sample tariff format, to provide filers an illustrative example to aid them in preparing their compliance filings.

18. Consistent with our practice in Order No. 587-V, each pipeline should designate a single tariff section under which every NAESB WGQ Standard incorporated by reference by the Commission is listed.16 The pipeline tariff filings should list all the incorporated standards with which the pipeline will comply. In addition, for any standard that the pipeline seeks approval not to comply with, the tariff filing must identify the standard in question and either identify the provision in its tariff that complies with the standard; 17 or provide an explanation of any waiver, extension of time, or other variance with respect to compliance with the standard that would excuse compliance.18

19. Consistent with our findings in Order No. 587-V,19 we propose that requests for waivers that do not meet the requirements set forth in Order No. 587-V will not be granted. In particular, as we explained in Order No. 587-V, waivers are unnecessary and will not be granted when the standard applies only on condition the pipeline performs a business function and the pipeline currently does not perform that function.20

19 Order No. 587-V, FERC Stats. & Regs., ¶ 31,332.

20 Order No. 587-V Compliance Order, 141 FERC ¶ 61,167 at PP 4, 38.

20. If the pipeline is requesting a continuation of an existing waiver or extension of time, it must include a table in its transmittal letter that identifies the standard for which a waiver or extension of time was granted, and the docket number or order citation to the proceeding in which the waiver or extension of time was granted. The pipeline must also present an explanation for why such waiver or extension of time should remain in force with regard to the WGQ Version 3.1 Standards.

21. This continues the Commission's practice of having pipelines include in their tariffs a common location that identifies the way the pipeline is incorporating all the NAESB WGQ Standards and the standards with which it is required to comply. As explained above, the Commission will post on its eLibrary website (under Docket No. RM96-1-041) a sample tariff format, to provide filers an illustrative example to aid them in preparing their compliance filings.21

21Id. P 24.

III. Notice of Use of Voluntary Consensus Standards

22. Office of Management and Budget Circular A-119 (section 11) (February 10, 1998) provides that Federal Agencies should publish a request for comment in a NOPR when the agency is seeking to issue or revise a regulation proposing to adopt a voluntary consensus standard or a government-unique standard. In this NOPR, the Commission is proposing to incorporate by reference voluntary consensus standards developed by the WGQ.

IV. Incorporation by Reference

23. The Office of the Federal Register requires agencies incorporating material by reference in final rules to discuss, in the preamble of the final rule, the ways that the materials it incorporates by reference are reasonably available to interested parties and how interested parties can obtain the materials.22 The regulations also require agencies to summarize, in the preamble of the final rule, the material it incorporates by reference. The standards we are proposing to incorporate by reference consist of seven suites of NAESB WGQ Business Practice Standards that touch on a variety of topics and are designed to streamline the transactional processes for the wholesale gas industry by promoting a more competitive and efficient market. These include the: WGQ Additional Business Practice Standards; WGQ Nominations Related Business Practice Standards; WGQ Flowing Gas Related Business Practice Standards; Invoicing Related Business Practice Standards; Quadrant Electronic Delivery Mechanism Related Business Practice Standards; Capacity Release Related Business Practice Standards; and internet Electronic Transport Related Business Practice Standards. These can be summarized as follows.

• The Creditworthiness related standards describe requirements for the exchange of information, notification, and communication between parties during the creditworthiness evaluation process.

• The Storage Information related standards define the information to be provided to natural gas service requesters related to storage activities and/or balances.

• The Gas/Electric Operational Communications related standards define communication protocols intended to improve coordination between the gas and electric industries in daily operational communications between transportation service providers and gas-fired power plants. The standards include requirements for communicating anticipated power generation fuel for the upcoming day as well as any operating problems that might hinder gas-fired power plants from receiving contractual gas quantities.

• The Operational Capacity related standards define requirements of the transportation service provider related to the reporting and requesting of a transportation service provider's operational capacity, total scheduled quantity, and operationally available capacity.

• The Unsubscribed Capacity related standards define requirements of the transportation service provider related to reporting and requesting a transportation service provider's available unsubscribed capacity.

• The Location Data Download related standards define requirements for the use of codes assigned by the transportation service provider for locations and common codes for parties communicating electronically.

25. The WGQ Nominations Related Business Practice Standards define the process by which a natural gas service requester with a natural gas transportation contract nominates (or requests) service from a pipeline or a transportation service provider for the delivery of natural gas.

26. The WGQ Flowing Gas Related Business Practice Standards define the business processes related to the communication of entitlement rights of flowing gas at a location, of the entitlement rights on a contractual basis, of the management of imbalances, and of the measurement and gas quality information of the actual flow of gas.

27. The Invoicing Related Business Practice Standards define the process for the communication of charges for services rendered (Invoice), communication of details about funds rendered in payment for services rendered (Payment Remittance), and communication of the financial status of a customer's account (Statement of Account).

29. The Capacity Release Related Business Practice Standards define the business processes for communication of information related to the selling of all or any portion of a transmission service requester's contract rights.

30. The internet Electronic Transport Related Business Practice Standards define the implementation of various technologies necessary to communicate transactions and other electronic data using standard protocols for electronic commerce over the internet between trading partners.

31. Our regulations provide that copies of the standards incorporated by reference may be obtained from the North American Energy Standards Board, 801 Travis Street, Suite 1675, Houston, TX 77002, Phone: (713) 356-0060. Copies of the standards may be inspected at the Federal Energy Regulatory Commission, Public Reference and Files Maintenance Branch, 888 First Street NE, Washington, DC 20426, Phone: (202) 502-8371, http://www.ferc.gov.

32. NAESB is a private consensus standards developer that develops voluntary wholesale and retail standards related to the energy industry. The procedures used by NAESB make its standards reasonably available to those affected by Commission regulations, which generally is comprised of entities that have the means to acquire the information they need to effectively participate in Commission proceedings. Participants can join NAESB, for an annual membership cost of $7,000, which entitles them to full participation in NAESB and enables them to obtain these standards at no additional cost. Non-members may obtain the Individual Standards Manual or Booklets for each of the seven Manuals by email for $250 per manual, which in the case of these standards would total $1,750. Non-members also may obtain the complete set of Standards Manuals, Booklets, and Contracts on USB flash drive for $2,000. NAESB also provides a free electronic read-only version of the standards for a three business day period or, in the case of a regulatory comment period, through the end of the comment period. In addition, NAESB considers requests for waivers of the charges on a case-by-case basis depending on need.

V. Information Collection Statement

33. The Office of Management and Budget (OMB) regulations require that OMB approve certain reporting, record keeping, and public disclosure requirements (information collection) imposed by an agency.23 Therefore, the Commission is submitting its proposed information collection to OMB for review in accordance with section 3507(d) of the Paperwork Reduction Act of 1995. Upon approval of a collection of information, OMB will assign an OMB control number and an expiration date. Respondents subject to the filing requirements of a rule will not be penalized for failing to respond to these collections of information unless the collection of information displays a valid OMB control number.

23 5 CFR 1320.11 (2017).

34. The Commission solicits comments on the Commission's need for this information, whether the information will have practical utility, the accuracy of the provided burden estimates, ways to enhance the quality, utility, and clarity of the information to be collected, and any suggested methods for minimizing respondents' burden, including the use of automated information techniques.

35. Public Reporting Burden: The Commission's burden estimates for the proposals in this NOPR are for one-time implementation of the information collection requirements of this NOPR (including tariff filing, documentation of the process and procedures, and information technology work).

36. The collections of information related to this NOPR fall under FERC-545 (Gas Pipeline Rates: Rate Change (Non-Formal)) 24 and FERC-549C (Standards for Business Practices of Interstate Natural Gas Pipelines).25 The following estimates of reporting burden are related only to this NOPR and anticipate the costs to pipelines for compliance with the Commission's proposals in this NOPR. The burden estimates are primarily related to implementing these standards and regulations and will not result in ongoing costs.

The one-time burden (for both the FERC-545 and FERC-549C) will be averaged over three years:

26 The number of respondents is the number of entities in which a change in burden from the current standards to the proposed exists, not the total number of entities from the current or proposed standards that are applicable.

27 The estimated hourly cost (salary plus benefits) provided in this section is based on the salary figures for May 2017 posted by the Bureau of Labor Statistics for the Utilities sector (available at http://www.bls.gov/oes/current/naics2_22.htm#13-0000) and scaled to reflect benefits using the relative importance of employer costs in employee compensation from May 2017 (available at https://www.bls.gov/oes/current/naics2_22.htm). The hourly estimates for salary plus benefits are:

Respondents: Business or other for profit (e.g., Natural Gas Pipelines, applicable to only a few small businesses).

Frequency of Responses: One-time implementation (related to business procedures, capital/start-up).

Necessity of Information: The proposals in this NOPR would, if implemented, upgrade the Commission's current business practices and communication standards by specifically: (1) Updating the Nominations Related Standards to standardize a rounding process for the elapsed-prorated-scheduled quantity calculation, and dictate that the “Service Requester Contract” data element signify business conditional nominations, rather than mandatory nominations; (2) updating the WGQ Electronic Delivery Mechanism related Standards to make three minor revisions designed to add clarity, update the minimum technical characteristics to account for changes in technology since the previous version (Version 3.0) of the WGQ standards, and update the minimum and suggested operating systems and web browsers that entities should support; and (3) revising the NAESB WGQ data sets or other technical implementation documentation while not resulting in modifications to the underlying business practice standards. The package of standards also includes minor corrections.

The implementation of these data requirements will provide additional transparency to informational posting websites and will improve communication standards. The implementation of these standards and regulations will promote the additional efficiency and reliability of the natural gas industries' operations thereby helping the Commission to carry out its responsibilities under the Natural Gas Act. In addition, the Commission's Office of Enforcement will use the data for general industry oversight.

Internal Review: The Commission has reviewed the requirements pertaining to business practices of natural gas pipelines and made a preliminary determination that the proposed revisions are necessary to establish more efficient coordination between the gas and electric industries. Requiring such information ensures both a common means of communication and common business practices to limit miscommunication for participants engaged in the sale of electric energy at wholesale and the transportation of natural gas. These requirements conform to the Commission's plan for efficient information collection, communication, and management within the natural gas pipeline industries. The Commission has assured itself, by means of its internal review, that there is specific, objective support for the burden estimates associated with the information requirements.

38. Comments concerning the collection of information(s) and the associated burden estimate(s), should be sent to the contact listed above and to the Office of Management and Budget, Office of Information and Regulatory Affairs, Washington, DC 20503 [Attention: Desk Officer for the Federal Energy Regulatory Commission, telephone: (202) 395-0710, fax: (202) 395-4718].

VI. Environmental Analysis

39. The Commission is required to prepare an Environmental Assessment or an Environmental Impact Statement for any action that may have a significant adverse effect on the human environment.28 The actions proposed to be taken here fall within categorical exclusions in the Commission's regulations for rules that are clarifying, corrective, or procedural, for information gathering, analysis, and dissemination, and for rules regarding sales, exchange, and transportation of natural gas that require no construction of facilities.29 Therefore, an environmental review is unnecessary and has not been prepared as part of this NOPR.

40. The Regulatory Flexibility Act of 1980 (RFA) 30 generally requires a description and analysis of proposed rules that will have significant economic impact on a substantial number of small entities. The Commission is not required to make such analysis if proposed regulations would not have such an effect.

30 5 U.S.C. 601-612.

41. Approximately 165 interstate natural gas pipelines, both large and small, are potential respondents subject to the requirements adopted by this rule. Most of the natural gas pipelines regulated by the Commission do not fall within the RFA's definition of a small entity,31 which is currently defined for natural gas pipelines as a company that, in combination with its affiliates, has total annual receipts of $27.5 million or less.32 For the year 2018, only eleven companies not affiliated with larger companies had annual revenues in combination with its affiliates of $27.5 million or less and therefore could be considered a small entity under the RFA. This represents about seven percent of the total universe of potential respondents that may have a significant burden imposed on them. The Commission estimates that the one-time implementation cost of the proposals in this NOPR is $538,560 (or $3,264 per entity, regardless of entity size).33 The Commission does not consider the estimated $3,264 impact per entity to be significant. Moreover, these requirements are designed to benefit all customers, including small businesses that must comply with them. Further, as noted above, adoption of consensus standards helps ensure the reasonableness of the standards by requiring that the standards draw support from a broad spectrum of industry participants representing all segments of the industry. Because of that representation and the fact that industry conducts business under these standards, the Commission's regulations should reflect those standards that have the widest possible support.

31See 5 U.S.C. 601(3) citing section 3 of the Small Business Act, 15 U.S.C. 623. Section 3 of the SBA defines a “small business concern” as a business which is independently owned and operated and which is not dominant in its field of operation (2017).

33 This number is derived by dividing the total cost figure by the number of respondents. $538,560/165 = $3,264.

42. Accordingly, pursuant to 605(b) of the RFA,34 the regulations proposed herein should not have a significant economic impact on a substantial number of small entities.

34 5 U.S.C. 605(b).

VIII. Comment Procedures

43. The Commission invites interested persons to submit comments on the matters and issues proposed in this document to be adopted, including any related matters or alternative proposals that commenters may wish to discuss. Comments are due October 1, 2018. Comments must refer to Docket No. RM96-1-041, and must include the commenter's name, the organization they represent (if applicable), and their address in their comments.

44. The Commission encourages comments to be filed electronically via the eFiling link on the Commission's website at http://www.ferc.gov. The Commission accepts most standard word processing formats. Documents created electronically using word processing software should be filed in native applications or print-to-PDF format and not in a scanned format. Commenters filing electronically do not need to make a paper filing.

45. Commenters that are not able to file comments electronically must send an original of their comments to: Federal Energy Regulatory Commission, Secretary of the Commission, 888 First Street NE, Washington, DC 20426.

46. All comments will be placed in the Commission's public files and may be viewed, printed, or downloaded remotely as described in the Document Availability section below. Commenters on this proposal are not required to serve copies of their comments on other commenters.

IX. Document Availability

47. In addition to publishing the full text of this document in the Federal Register, the Commission provides all interested persons an opportunity to view and/or print the contents of this document via the internet through the Commission's Home Page (http://www.ferc.gov) and in the Commission's Public Reference Room during normal business hours (8:30 a.m. to 5:00 p.m. Eastern time) at 888 First Street NE, Room 2A, Washington DC 20426.

48. From the Commission's Home Page on the internet, this information is available on eLibrary. The full text of this document is available on eLibrary in PDF and Microsoft Word format for viewing, printing, and/or downloading. To access this document in eLibrary, type the docket number excluding the last three digits of this document in the docket number field.

49. User assistance is available for eLibrary and the Commission's website during normal business hours from the Commission's Online Support at (202) 502-6652 (toll free at 1-866-208-3676) or email at ferconlinesupport@ferc.gov, or the Public Reference Room at (202) 502-8371, TTY (202) 502-8659. Email the Public Reference Room at public.referenceroom@ferc.gov.

§ 284.12 Standards for pipeline business operations and communications.

(a) * * *

(1) An interstate pipeline that transports gas under subparts B or G of this part must comply with the business practices and electronic communications standards as promulgated by the North American Energy Standards Board, as incorporated herein by reference in paragraphs (a)(1)(i) thru (vii) of this section.

The Environmental Protection Agency (EPA) is proposing to approve portions of three state implementation plan (SIP) revisions submitted by the State of California to meet Clean Air Act (CAA or “the Act”) requirements for the 2008 8-hour ozone national ambient air quality standards (NAAQS or “standards”) in the San Joaquin Valley, California ozone nonattainment area. First, the EPA is proposing to approve the portions of the 2016 Ozone Plan for the 2008 8-Hour Ozone Standard (“2016 Ozone Plan”) that address the requirements to demonstrate attainment by the applicable attainment date and implementation of reasonably available control measures, among other requirements. Second, the EPA is proposing to approve the portions of the Revised Proposed 2016 State Strategy for the State Implementation Plan (“2016 State Strategy”) related to the ozone control strategy for San Joaquin Valley for the 2008 ozone standards, including a specific aggregate emissions reduction commitment. Lastly, the EPA is proposing to approve an air district rule addressing the emission statement requirement for ozone nonattainment areas. The EPA is not taking action at this time on the portions of the San Joaquin Valley 2016 Ozone Plan that address the requirements for a reasonable further progress (RFP) demonstration, motor vehicle emissions budgets (MVEBs), a base year emissions inventory, and contingency measures for failure to attain or to meet reasonable further progress milestones. We intend to address these remaining elements in a forthcoming proposal.

DATES:

Written comments must arrive on or before October 1, 2018.

ADDRESSES:

Submit your comments, identified by Docket ID No. EPA-R09-OAR-2018-0535 at https://www.regulations.gov. For comments submitted at Regulations.gov, follow the online instructions for submitting comments. Once submitted, comments cannot be edited or removed from Regulations.gov. The EPA may publish any comment received to its public docket. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. The EPA will generally not consider comments or comment contents located outside of the primary submission (i.e. on the web, cloud, or other file sharing system). For additional submission methods, please contact the person identified in the FOR FURTHER INFORMATION CONTACT section. For the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit http://www.epa.gov/dockets/commenting-epa-dockets.

Table of ContentsI. Regulatory ContextA. Ozone Standards, Area Designations and SIPsB. The San Joaquin Valley Ozone Nonattainment AreaC. CAA and Regulatory Requirements for 2008 Ozone Nonattainment Area SIPsII. Submissions From the State of California To Address 2008 Ozone Requirements in the San Joaquin ValleyA. Summary of SubmissionsB. Clean Air Act Procedural Requirements for Adoption and Submission of SIP RevisionsIII. Evaluation of the 2016 Ozone PlanA. Emissions InventoriesB. Emission StatementC. Reasonably Available Control Measures Demonstration and Control StrategyD. Attainment DemonstrationE. Rate of Progress Plan and Reasonable Further Progress DemonstrationF. Transportation Control Strategies and Measures To Offset Emissions Increases From Vehicle Miles TraveledG. Contingency Measures To Provide for RFP and AttainmentH. Clean Fuels or Advanced Control Technology for BoilersI. Motor Vehicle Emissions Budgets for Transportation ConformityJ. Other Clean Air Act Requirements Applicable to Extreme Ozone Nonattainment AreasIV. Other Commitments To Reduce EmissionsV. Proposed ActionVI. Incorporation by ReferenceVII. Statutory and Executive Order ReviewsI. Regulatory ContextA. Ozone Standards, Area Designations and SIPs

Ground-level ozone pollution is formed from the reaction of volatile organic compounds (VOC) and oxides of nitrogen (NOX) in the presence of sunlight.1 These two pollutants, referred to as ozone precursors, are emitted by many types of sources, including on-and off-road motor vehicles and engines, power plants and industrial facilities, and smaller area sources such as lawn and garden equipment and paints.

1 The State of California typically refers to reactive organic gases (ROG) in its ozone-related submissions since VOC in general can include both reactive and unreactive gases. However, since ROG and VOC inventories pertain to common chemical species (e.g., benzene, xylene, etc.), we refer to this set of gases as VOC in this proposed rule.

Scientific evidence indicates that adverse public health effects occur following exposure to ozone, particularly in children and adults with lung disease. Breathing air containing ozone can reduce lung function and inflame airways, which can increase respiratory symptoms and aggravate asthma or other lung diseases.2

2See “Fact Sheet—2008 Final Revisions to the National Ambient Air Quality Standards for Ozone” dated March 2008.

Under section 109 of the CAA, the EPA promulgates NAAQS for pervasive air pollutants, such as ozone. The EPA has previously promulgated NAAQS for ozone in 1979 and 1997.3 In 2008, the EPA revised and further strengthened the ozone NAAQS by setting the acceptable level of ozone in the ambient air at 0.075 parts per million (ppm) averaged over an 8-hour period.4 Although the EPA further tightened the 8-hour ozone NAAQS to 0.070 ppm in 2015, this action relates to the requirements for the 2008 ozone NAAQS.5

3 The ozone NAAQS promulgated in 1979 was 0.12 parts per million (ppm) averaged over a 1-hour period. See 44 FR 8202 (February 8, 1979). The ozone NAAQS promulgated in 1997 was 0.08 ppm averaged over an 8-hour period. See 62 FR 38856 (July 18, 1997).

4See 73 FR 16436 (March 27, 2008).

5 Information on the 2015 ozone NAAQS is available at 80 FR 65292 (October 26, 2015).

Following promulgation of a new or revised NAAQS, the EPA is required under CAA section 107(d) to designate areas throughout the country as attaining or not attaining the NAAQS. The San Joaquin Valley was designated as nonattainment for the 2008 ozone standards on May 21, 2012, and classified as Extreme.6

6See 77 FR 30088 (May 21, 2012).

Under the CAA, after the EPA designates areas as nonattainment for a NAAQS, states with nonattainment areas are required to submit SIP revisions that provide for, among other things, attainment of the NAAQS within certain prescribed periods that vary depending on the severity of nonattainment. Areas classified as Extreme must attain the NAAQS within 20 years of the effective date of the nonattainment designation.7

7See CAA section 181(a)(1), 40 CFR 51.1102 and 51.1103(a).

In California, the California Air Resources Board (CARB or “State”) is the state agency responsible for the adoption and submission to the EPA of California SIPs and SIP revisions, and it has broad authority to establish emissions standards and other requirements for mobile sources. Local and regional air pollution control districts in California are responsible for the regulation of stationary sources and are generally responsible for the development of regional air quality plans. In the San Joaquin Valley, the San Joaquin Valley Air Pollution Control District (SJVAPCD or “District”) develops and adopts air quality management plans to address CAA planning requirements applicable to that region. Such plans are then submitted to CARB for adoption and submittal to the EPA as revisions to the California SIP.

B. The San Joaquin Valley Ozone Nonattainment Area

The San Joaquin Valley nonattainment area for the 2008 ozone standards consists of San Joaquin, Stanislaus, Merced, Madera, Fresno, Tulare, and Kings counties, and the western portion of Kern County. The San Joaquin Valley nonattainment area stretches over 250 miles from north to south, averages a width of 80 miles, and encompasses over 23,000 square miles. It is partially enclosed by the Coast Mountain range to the west, the Tehachapi Mountains to the south, and the Sierra Nevada range to the east.8

8 For a precise definition of the boundaries of the San Joaquin Valley 2008 ozone nonattainment area, see 40 CFR 81.305.

The population of the San Joaquin Valley in 2015 was estimated to be nearly 4.2 million people, and is projected to increase by 25.3 percent in 2030 to over 5.2 million people.9 Ambient 8-hour ozone concentrations in the San Joaquin Valley are above the level of the 2008 8-hour ozone NAAQS. The maximum design value for the area, based on certified data at the Parlier monitor (Air Quality System ID: 06-019-4001), is 0.092 ppm for the 2015-2017 period.10

9 The population estimates and projections include all of Kern County, not just the portion of Kern County within the jurisdiction of the SJVAPCD. See Chapter 1 and table 1-1 of the District's 2016 Ozone Plan for the 2008 8-Hour Ozone Standard.

10See Air Quality System (AQS) Design Value Report, 20180621_DVRpt_SJV_2008-8hrO3_2015-2017.pdf in the docket for this proposed action. The AQS is a database containing ambient air pollution data collected by the EPA and state, local, and tribal air pollution control agencies from over thousands of monitors.

States must implement the 2008 ozone standards under Title 1, part D of the CAA, which includes section 172 (“Nonattainment plan provisions in general”) and sections 181-185 of subpart 2 (“Additional Provisions for Ozone Nonattainment Areas”). To assist states in developing effective plans to address ozone nonattainment problems, in 2015 the EPA issued a SIP Requirements Rule (SRR) for the 2008 ozone standards (“2008 Ozone SRR”) that addresses e.g., attainment dates, requirements for emissions inventories, attainment and RFP demonstrations, and the transition from the 1997 8-hour ozone standards to the 2008 8-hour ozone standards and associated anti-backsliding requirements.11 The 2008 Ozone SRR is codified at 40 CFR part 51, subpart AA. We discuss each of the CAA and regulatory requirements for 2008 8-hour ozone plans in more detail below.

11See 80 FR 12264, March 6, 2015.

The EPA's 2008 Ozone SRR was challenged, and on February 16, 2018, the U.S. Court of Appeals for the D.C. Circuit (“D.C. Circuit”) published its decision in South Coast Air Quality Management. District v. EPA12 vacating portions of the 2008 Ozone SRR. The 2008 Ozone SRR required the baseline emissions inventory for RFP plans to be the emissions inventory for the most recent calendar year for which a triennial inventory is required to be submitted to the EPA under subpart A (“Air Emissions Reporting Requirements”) of 40 CFR part 51, and it allowed states to use an alternative year, between 2008 and 2012, for the baseline emissions inventory provided the state demonstrates why the alternative baseline year is appropriate. In the South Coast decision, the D.C. Circuit vacated the provisions of the 2008 Ozone SRR that allowed states to justify and use an alternative baseline year for demonstrating RFP. The RFP demonstrations in several California ozone plans developed to address nonattainment area requirements for the 2008 ozone standards, including the ozone plan for the South Coast Air Basin and San Joaquin Valley, are based on the alternative baseline year of 2012. In response to the South Coast decision regarding alternative baseline years, the South Coast Air Quality Management District filed a petition in the D.C. Circuit requesting rehearing on the RFP baseline year issue to clarify that nonattainment areas may use the year of the nonattainment designation (i.e., 2012 for the 2008 ozone standards) as the baseline year for calculating RFP.13 Because the D.C. Circuit has not yet issued a response to the petitions filed for rehearing, the EPA is not proposing action at this time on the San Joaquin Valley's RFP demonstration for the 2008 ozone standards.14 Several required attainment plan elements are related to the RFP demonstration, namely the MVEBs, the base year emissions inventory, and contingency measures. Therefore, the EPA is also not proposing action at this time on these three elements. For completeness, however, in this proposed action, we provide a summary of all the required elements, including those for which we will be proposing action at a later time.

14 The EPA also filed a petition for rehearing in the D.C. Circuit but did not request rehearing of the RFP baseline year issue.

II. Submissions From the State of California To Address 2008 Ozone Requirements in the San Joaquin ValleyA. Summary of Submissions

On August 24, 2016, in response to the area's designation as nonattainment and classification of Extreme for the 2008 ozone NAAQS, CARB submitted the 2016 Ozone Plan to the EPA as a revision to the California SIP.15 Prior to submittal to the EPA, CARB approved the 2016 Ozone Plan, which had previously been adopted by the District and forwarded to CARB for approval and submittal to the EPA.

The 2016 Ozone Plan submittal consists of documents originating from the District (e.g., the 2016 Ozone Plan with Appendices and the District Governing Board Resolution) and CARB (e.g., the CARB Staff Report and Appendices, and the CARB Resolution adopting the 2016 Ozone Plan and CARB Staff Report as a SIP revision).16 The 2016 Ozone Plan addresses the requirements for base year and projected future year emissions inventories, air quality modeling demonstrating attainment of the 2008 ozone NAAQS by the applicable attainment year, provisions demonstrating implementation of reasonably available control measures (RACM), provisions for advanced technology/clean fuels for boilers, provisions for transportation control strategies and measures, a demonstration of RFP, and contingency measures for failure to make RFP or attain, among other requirements.

The 2016 Ozone Plan discusses compliance with the emission statement requirement under CAA section 182(a)(3)(B) in terms of District Rule 1160, “Emission Statements.” District Rule 1160 was adopted by the District on November 18, 1992, and submitted to the EPA by CARB on January 11, 1993, as a revision to the California SIP.17 The EPA has not yet taken action on the January 11, 1993 submittal of District Rule 1160 but is proposing to do so as part of today's proposed action.

In approving the 2016 Ozone Plan, CARB anticipated the subsequent adoption of a commitment by CARB to achieve an aggregate emission reduction of 8 tons per day (tpd) of NOX in San Joaquin Valley by 2031. On March 23, 2017, CARB approved the 2016 State Strategy as a revision to the California SIP and submitted the 2016 State Strategy to the EPA on April 27, 2017.18 The 2016 State Strategy, as approved and submitted by CARB, includes an 8 tpd NOX emission reduction commitment for San Joaquin Valley. The 2016 State Strategy commits to certain regulatory initiatives (e.g., new California low-NOX standards for on-road heavy-duty engines and low-emission diesel requirements for off-road equipment) in addition to aggregate emissions reductions by certain years in specific areas, such as San Joaquin Valley.19

B. Clean Air Act Procedural Requirements for Adoption and Submission of SIP Revisions

CAA sections 110(a)(1) and (2) and 110(l) require a state to provide reasonable public notice and opportunity for public hearing prior to the adoption and submission of a SIP or SIP revision. To meet this requirement, every SIP submittal should include evidence that adequate public notice was given and an opportunity for a public hearing was provided consistent with the EPA's implementing regulations in 40 CFR 51.102.

Both the District and CARB have satisfied the applicable statutory and regulatory requirements for reasonable public notice and hearing prior to the adoption and submittal of the 2016 Ozone Plan, the 2016 State Strategy, and District Rule 1160. With respect to the 2016 Ozone Plan, the District conducted a public workshop on May 23, 2014, and held two additional workshops on March 22, 2016, on the Draft 2016 Ozone Plan. On May 11, 2016, the District published notices in several local newspapers of a public hearing to be held on June 16, 2016, for the adoption of the 2016 Ozone Plan.20 On June 16, 2016, the District held the public hearing, and, through Resolution No. 16-6-20, adopted the 2016 Ozone Plan and directed the Executive Officer to forward the plan to CARB for inclusion in the California SIP.

CARB also provided the required public notice and opportunity for public comment on the 2016 Ozone Plan. On June 17, 2016, CARB released for public review its staff report for the 2016 Ozone Plan and published a notice of public meeting to be held on July 21, 2016, to consider approval of the 2016 Ozone Plan.21 On July 21, 2016, CARB held the hearing and approved the staff report and directed its Executive Officer to submit the CARB staff report and the 2016 Ozone Plan to the EPA for approval into the California SIP.22 On August 24, 2016, the Executive Officer of CARB submitted the 2016 Ozone Plan to the EPA and included the transcript of the hearing held on July 21, 2016.23 On December 19, 2016, the EPA determined that the submittal was complete.24

21See https://www.arb.ca.gov/regact/nonreg/2016/sjvsip2016.pdf.

22See CARB Resolution 16-8.

23See transcript of the July 21, 2016 Meeting of the State of California Air Resources Board.

With respect to the 2016 State Strategy, on May 17, 2016, CARB circulated for public review and comment the Proposed State SIP Strategy, provided a 60-day comment period, and provided notice of a public hearing by the CARB Board to be held on September 22, 2016. On March 7, 2017, in response to comments received during the public comment period and later during public workshops, and based on Board direction provided to staff during the September 22, 2016 CARB Board meeting, CARB released a Revised Proposed State SIP Strategy. On March 23, 2017, through Resolution 17-7, CARB adopted the Revised Proposed State SIP Strategy (herein referred to as the “2016 State Strategy”) after a duly-noticed public hearing. On April 27, 2017, CARB submitted the 2016 State Strategy to the EPA as a revision to the California SIP.

With respect to District Rule 1160, the District conducted four public workshops to receive comment, and published notices in several local newspapers of a public hearing to be held on November 18, 1992. The District adopted the rule on November 18, 1992, and forwarded the rule to CARB for approval and submittal to the EPA as a revision to the California SIP. CARB did so by letter dated January 11, 1993.25

25See CARB submittal “State of California Implementation Plan for Achieving and Maintaining the National Ambient Air Quality Standards, Exhibit A,” January 11, 1993.

Based on information provided in each SIP revision and summarized above, the EPA has determined that all hearings were properly noticed. Therefore, we find that the submittals of the 2016 Ozone Plan, the 2016 State Strategy, and District Rule 1160 meet the procedural requirements for public notice and hearing in CAA sections 110(a) and 110(l) and 40 CFR 51.102.

CAA sections 172(c)(3) and 182(a)(1) require states to submit for each ozone nonattainment area a “base year inventory” that is a comprehensive, accurate, current inventory of actual emissions from all sources of the relevant pollutant or pollutants in the area. In addition, the 2008 Ozone SRR requires that the inventory year be selected consistent with the baseline year for the RFP demonstration, which is usually the most recent calendar year for which a complete triennial inventory is required to be submitted to the EPA under the Air Emissions Reporting Requirements.26 The EPA has issued guidance on the development of base year and future year emissions inventories for 8-hour ozone and other pollutants.27 Emissions inventories for ozone must include emissions of VOC and NOX and represent emissions for a typical ozone season weekday.28 States should include documentation explaining how the emissions data were calculated. In estimating mobile source emissions, states should use the latest emissions models and planning assumptions available at the time the SIP is developed.29

27See “Emissions Inventory Guidance for Implementation of Ozone and Particulate Matter National Ambient Air Quality Standards (NAAQS) and Regional Haze Regulations,” (“EI Guidance”), EPA-454/B-17-002, May 2017. At the time the 2016 Ozone Plan was developed, the following EPA emissions inventory guidance applied: “Emissions Inventory Guidance for Implementation of Ozone and Particulate Matter National Ambient Air Quality Standards (NAAQS) and Regional Haze Regulations” (“EI Guidance”), EPA-454-R-05-001, November 2005.

28 40 CFR 51.1115(a) and (c), and 40 CFR 51.1100(bb) and (cc).

29See 80 FR 12264, at 12290 (March 6, 2015).

2. Summary of State's Submission

The base year and future year baseline inventories for NOX and VOC for the San Joaquin Valley 2008 ozone nonattainment area, together with additional documentation for the inventories, are found in Chapter 3 and Appendix B of the 2016 Ozone Plan. Because ozone levels in San Joaquin Valley are typically higher from May through October, these inventories represent average summer day emissions. The 2016 Ozone Plan includes a base year inventory for 2012 and future year inventories for the RFP milestone years. The inventories reflect reductions from adopted federal, state, and district measures. All inventories include emissions from point, area, on-road, and non-road sources. Both base year and projected future year inventories use the most current version of California's mobile source emissions model, EMFAC2014, for estimating on-road motor vehicle emissions.30

30 EMFAC is short for EMission FACtor.

The emissions inventories in the 2016 Ozone Plan were developed jointly by CARB and the District, based on data from these two agencies, combined with data from the California Department of Transportation, the Department of Motor Vehicles, the Department of Pesticide Regulation, the California Energy Commission and regional transportation agencies. The emissions inventories reflect actual emission reports for point sources, and estimates for mobile and area-wide sources are based on the most recent models and methodologies. CARB and the District also reviewed the growth profiles for point and area-wide source categories and updated them as necessary to ensure that the emission projections are based on data that reflect historical trends, current conditions, and recent economic and demographic forecasts.

CARB developed the emissions inventory for on-road and off-road mobile sources. On-road mobile source emissions, which include passenger vehicles, buses, and trucks, were estimated using CARB's EMFAC2014 model. The on-road emissions were calculated by applying EMFAC2014 emission factors to the transportation activity data provided by the local San Joaquin Valley transportation agencies from their 2014 adopted Regional Transportation Plan. The EPA has approved this model for use in SIPs and transportation conformity analyses.31 Non-road mobile source emissions were estimated using either newer category-specific models or, where a new model was not available, the OFFROAD2007 model.

31See 80 FR 77337 (December 14, 2015).

The 2012 inventory was projected to 2015 and future years using CARB's California Emission Projection Analysis Model (CEPAM). The District identified several measures that achieve emissions reductions from stationary sources in and after 2012, including rules for open burning, boilers, flares, solid fuel boilers, and glass melting furnaces, among others.32 Table 1 provides a summary of the emission estimates prepared for the 2016 Ozone Plan for the base year (2012) and the attainment year (2031).

32See table 5-1 of the 2016 Ozone Plan. All the rules listed in table 5-1 have been approved as revision to the SIP.

Table 1—San Joaquin Valley Base Year and Attainment Year Emissions Inventory Summary[Summer average tons per day]CategoryNOX

(2012)

NOX

(2031)

VOC

(2012)

VOC

(2031)

Stationary Sources42.429.585.3100.0Area Sources4.74.9147.0152.7On-road Mobile187.745.160.518.3Off-road Mobile104.752.444.525.7Total339.6131.9337.3296.7Source: 2016 Ozone Plan, Appendix B (note that because of rounding conventions, the totals may not reflect total of all categories).3. The EPA's Review of the State's Submission

As described elsewhere, the 2008 Ozone SRR requires the base year inventory to be consistent with the RFP baseline year inventory; accordingly, the 2016 Ozone Plan uses the year 2012 for the base year inventory and the RFP baseline year inventory. The EPA has evaluated the 2012 base year inventory and the methodologies used by the District and CARB, and we find them to be comprehensive, accurate, and current. However, as discussed elsewhere, we are not taking action at this time to approve the base year emissions inventory or the emissions inventories for any of the RFP milestone years in the 2016 Ozone Plan. We intend to take action on the base year emissions inventory at a later time, together with the RFP demonstration, and other elements affected by the South Coast decision.

However, we note that the attainment demonstration and VMT offset demonstration rely on the 2012 base year inventory. As discussed in section III.D of this proposed action, the EPA's draft modeling guidance states that the EPA does not require a particular year to be used for the base year for modeling purposes. The most appropriate base year may be the most recent year of the National Emissions Inventory, or it may be selected in view of unusual meteorology, transport patterns, or other factors that may vary from year to year.33 Based on our review of the emissions inventories provided in the 2016 Ozone Plan, we find that the 2012 base year emissions inventory and future year emissions inventories that are derived therefrom provide an acceptable basis for the attainment demonstration and VMT offset demonstration in the 2016 Ozone Plan.

33See section 2.7.1 of Modeling Guidance for Demonstrating Attainment of Air Quality Goals for Ozone, PM2.5, and Regional Haze, December 2014 Draft, EPA OAQPS; available at https://www.epa.gov/scram/state-implementation-plan-sip-attainment-demonstration-guidance.

B. Emission Statement1. Statutory and Regulatory Requirements

Section 182(a)(3)(B)(i) of the Act requires states to submit a SIP revision requiring owners or operators of stationary sources of VOC or NOX to provide the state with statements of actual emissions from such sources. Statements must be submitted at least every year and must contain a certification that the information contained in the statement is accurate to the best knowledge of the individual certifying the statement. Section 182(a)(3)(B)(ii) of the Act allows states to waive the emission statement requirement for any class or category of stationary sources that emit less than 25 tons per year (tpy) of VOC or NOX, if the state provides an inventory of emissions from such class or category of sources as part of the base year or periodic inventories required under CAA sections 182(a)(1) and 182(a)(3)(A), based on the use of emission factors established by the EPA or other methods acceptable to the EPA.

The preamble of the 2008 Ozone SRR states that if an area has a previously approved emission statement rule for the 1997 ozone NAAQS or the 1-hour ozone NAAQS that covers all portions of the nonattainment area for the 2008 ozone NAAQS, such rule should be sufficient for purposes of the emission statement requirement for the 2008 ozone NAAQS.34 The state should review the existing rule to ensure it is adequate and, if so, may rely on it to meet the emission statement requirement for the 2008 ozone NAAQS. Where an existing emission statement requirement is still adequate to meet the requirements of this rule, states can provide the rationale for that determination to the EPA in a written statement in the SIP to meet this requirement. States should identify the various requirements and how each is met by the existing emission statement program. Where an emission statement requirement is modified for any reason, states must provide the revisions to the emission statement as part of their SIP.

34See 80 FR 12264, at 12291 (March 6, 2015).

2. Summary of the State's Submission

The District adopted Rule 1160, “Emission Statements,” on November 18, 1992, to address the SIP submittal requirements for emission statements for areas such as San Joaquin Valley that were designated as nonattainment for the 1-hour ozone NAAQS under the CAA Amendments of 1990. CARB submitted District Rule 1160 to the EPA on January 11, 1993.

District Rule 1160 applies to all owners and operators of any stationary source category that emits or may emit VOC or NOX, but allows the District to waive the requirements for any class or category of stationary sources that emit less than 25 tpy of VOC or NOX under certain circumstances. Under District Rule 1160, owners or operators must provide the District, on an annual basis, with a written statement in such form as the District prescribes, showing actual emissions of VOC and NOX from the source. Owners or operators may comply with the requirement by completing and returning either an Emission Statement or an Emission Data Survey Form. Both the emission statement and the data survey form are intended to provide an estimate of actual emissions from the given stationary source. Lastly, District Rule 1160 requires certification by the responsible official that the information is accurate to the best knowledge of the individual certifying the information.

The 2016 Ozone Plan concludes that District Rule 1160 continues to meet the emission statement requirements of CAA section 182(a)(3)(B) and relies on that rule to meet the emission statement requirements for the 2008 ozone standards.35

As noted previously, the EPA has not taken action on CARB's January 11, 1993 submittal of District Rule 1160 but is proposing to do so herein. First, we have evaluated District Rule 1160 for compliance with the specific requirements for emission statements under CAA section 182(a)(3)(B)(i). We find that District Rule 1160 applies within the entire ozone nonattainment area; applies to all permitted sources of VOC and NOX; requires the submittal, on an annual basis, of the types of information necessary to estimate actual emissions from the subject stationary sources; and requires certification by the responsible officials representing the owners and operators of stationary sources. As such, we find that District Rule 1160 meets the requirements of CAA section 182(a)(3)(B)(i).

We also note that, while District Rule 1160 provides authority to the District to waive the requirement for any class or category of stationary sources that emit less than 25 tpy, such a waiver is allowed under CAA section 182(a)(3)(B)(ii) so long as the state includes estimates of such class or category of stationary sources in base year emissions inventories and periodic inventories submitted under CAA sections 182(a)(1) and 182(a)(3)(A), based on EPA emissions factors or other methods acceptable to the EPA. We recognize that emissions inventories developed by CARB for San Joaquin Valley routinely include actual emissions estimates for all stationary sources or classes or categories of such sources, including those less than 25 tpy, and that such inventories provide the basis for inventories submitted to meet the requirements of CAA sections 182(a)(1) and 182(a)(3)(A). By approval of emissions inventories as meeting the requirements of CAA sections 182(a)(1) and 182(a)(3)(A), the EPA is implicitly accepting the methods and factors used by CARB to develop those emissions estimates. Our most recent approval of a base year emissions inventory for San Joaquin Valley is found at 77 FR 12652 (March 1, 2012) (approval of base year emissions inventory for the 1997 ozone NAAQS).

Thus, for the reasons stated above, we propose to approve District Rule 1160, which CARB submitted on January 11, 1993, as meeting the emission statement requirements under CAA section 182(a)(3)(B). For more detailed information concerning our evaluation of District Rule 1160, please see the related technical support document.36

36 EPA, Region IX, Technical Support Document for EPA's Rulemaking for the California State Implementation Plan, San Joaquin Valley Unified Air Pollution Control District Rule 1160 Emission Statements.

C. Reasonably Available Control Measures Demonstration and Control Technology1. Statutory and Regulatory Requirements

CAA section 172(c)(1) requires that each attainment plan provide for the implementation of all RACM as expeditiously as practicable (including such reductions in emissions from existing sources in the area as may be obtained through implementation of reasonably available control technology), and also provide for attainment of the NAAQS. The 2008 Ozone SRR requires that, for each nonattainment area required to submit an attainment demonstration, the state concurrently submit a SIP revision demonstrating that it has adopted all RACM necessary to demonstrate attainment as expeditiously as practicable and to meet any RFP requirements.37

37See 40 CFR 51.1112(c).

The EPA has previously provided guidance interpreting the RACM requirement in the General Preamble for the Implementation of the Clean Air Act Amendments of 1990 and in a memorandum entitled “Guidance on the Reasonably Available Control Measure Requirement and Attainment Demonstration Submissions for Ozone Nonattainment Areas.” 38 In summary, to address the requirement to adopt all RACM, states should consider all potentially reasonable control measures for source categories in the nonattainment area to determine whether they are reasonably available for implementation in that area and whether they would, if implemented individually or collectively, advance the area's attainment date by one year or more.39 Any measures that are necessary to meet these requirements that are not already either federally promulgated, or part of the state's SIP, or otherwise creditable in the SIP, must be submitted in enforceable form as part of the state's attainment plan for the area.40

38See General Preamble, 57 FR 13498 at 13560 (April 16, 1992) and Memorandum dated November 30, 1999, from John Seitz, Director, OAQPS, to Regional Air Directors, titled “Guidance on the Reasonably Available Control Measure Requirement and Attainment Demonstration Submissions for Ozone Nonattainment Areas.”

39Ibid. See also 44 FR 20372 (April 4, 1979), and memorandum dated December 14, 2000, from John S. Seitz, Director, OAQPS, to Regional Air Directors, titled “Additional Submission on RACM From States with Severe One-Hour Ozone Nonattainment Area SIPs.”

40 For ozone nonattainment areas classified as Moderate or above, CAA section 182(b)(2) also requires implementation of RACT for all major sources of VOC and for each VOC source category for which the EPA has issued a Control Techniques Guideline (CTG). CAA section 182(f) requires that RACT under section 182(b)(2) also apply to major stationary sources of NOX. In Extreme areas, a major source is a stationary source that emits or has the potential to emit at least 10 tpy of VOC or NOX (see CAA section 182(e) and (f)). Under the 2008 Ozone SRR, states were required to submit SIP revisions meeting the RACT requirements of CAA sections 182(b)(2) and 182(f) no later than 24 months after the effective date of designation for the 2008 Ozone NAAQS and to implement the required RACT measures as expeditiously as practicable but no later than January 1 of the 5th year after the effective date of designation (see 40 CFR 51.1112(a)). California submitted the CAA section 182 RACT SIP for San Joaquin Valley on July 18, 2014, and the EPA fully approved this submission on July 12, 2018. See 83 FR 41006 (August 17, 2018). We are not addressing the section 182 RACT requirements in today's proposed rule.

CAA section 172(c)(6) requires that nonattainment area plans include enforceable emission limitations, and such other control measures, means or techniques (including economic incentives such as fees, marketable permits, and auctions of emission rights), as well as schedules and timetables for compliance, as may be necessary or appropriate to provide for timely attainment of the NAAQS.41 Under the 2008 Ozone SRR, all control measures needed for attainment must be implemented no later than the beginning of the attainment year ozone season.42 The attainment year ozone season is defined as the ozone season immediately preceding a nonattainment area's maximum attainment date.43

41See also CAA section 110(a)(2)(A).

42See 40 CFR 51.1108(d).

43See 40 CFR 51.1100(h).

2. Summary of the State's Submission

For the 2016 Ozone Plan, the District, CARB, and the local metropolitan planning organizations (MPOs) each undertook a process to identify and evaluate potential RACM that could contribute to expeditious attainment of the 2008 Ozone NAAQS in the San Joaquin Valley. We describe each agency's efforts below.

a. District's RACM Analysis

The District's RACM demonstration and control strategy for the 2008 ozone NAAQS focuses on stationary and area source controls and is described in Chapter 5, Chapter 6 and Appendix C of the 2016 Ozone Plan. To identify potential RACM, the District reviewed 59 control measures for a number of source categories and compared its measures against federal requirements and regulations implemented by the State and other air districts. In the years prior to the adoption of the 2016 Ozone Plan, the District developed and implemented comprehensive plans to provide for attainment of the NAAQS for fine particulate matter (PM2.5) (e.g., the 2012 PM2.5 Plan for the 2006 PM2.5 NAAQS) and ozone (e.g., the 2004 Ozone Plan for the 1-hour ozone NAAQS, the 2007 Ozone Plan for the 1997 ozone NAAQS, and the 2013 Ozone Plan for the 1-hour ozone NAAQS).44 These plans have resulted in the District's adoption of many new rules and amendments to existing rules for stationary and area sources. In addition, although the District does not have authority to directly regulate emissions from mobile sources, the District has implemented control strategies to indirectly reduce emissions from mobile sources.45

Table 2 identifies the District control measures listed in table 5-1 of the 2016 Ozone Plan, which contribute toward attainment of the 2008 ozone NAAQS by 2031. The EPA has approved all of these measures into the California SIP.

Table 2—District Rules Achieving Emissions Reductions in or After 2012Rule No.Rule titleDate adopted or last

The District provides a more comprehensive evaluation of its RACM control strategy in Appendix C of the 2016 Ozone Plan, which provides the following:

• Description of the sources within the category or sources subject to the rule;

• Base year and projected baseline year emissions for the source category affected by the rule;

• Discussion of the current requirements of the rule; and

• Discussion of potential additional control measures, including, in many cases, a discussion of the technological and economic feasibility of the additional control measures. This includes comparison of each District rule to analogous control measures adopted by other agencies (including the EPA, the South Coast Air Quality Management District, and the Bay Area Air Quality Management District).

We provide more detailed information about these control measures in our technical support document.46

46 EPA, Region IX, Technical Support Document: Proposed Approval of Portions of the San Joaquin Valley 2016 Ozone Plan: District Stationary and Area Source Control Strategy.

Based on its evaluation of all of these measures, the District concludes that it is implementing all RACM for sources under the District's jurisdiction.

b. CARB's RACM Analysis

Chapters 5 and 6 of the 2016 Ozone Plan contain CARB's evaluation of mobile source and other statewide control measures that reduce emissions of NOX and VOC in the San Joaquin Valley. Source categories for which CARB has primary responsibility for reducing emissions in California include most new and existing on- and off-road engines and vehicles, motor vehicle fuels, and consumer products. The California Department of Pesticide Regulation is responsible for regulating the application of pesticides, which is a significant source of VOC emissions in the San Joaquin Valley.

Given the need for substantial emissions reductions from mobile and area sources to meet the NAAQS in California nonattainment areas, the State of California has been a leader in the development of stringent control measures for on-road and off-road mobile sources and the fuels that power them. California has unique authority under CAA section 209 (subject to a waiver by the EPA) to adopt and implement new emission standards for many categories of on-road vehicles and engines, and new and in-use off-road vehicles and engines.

Historically, the EPA has allowed California to take into account emissions reductions from CARB regulations for which the EPA has issued waiver or authorizations under CAA section 209, notwithstanding the fact that these regulations have not been approved as part of the California SIP. However, in response to the decision by the United States Court of Appeals for the Ninth Circuit (“Ninth Circuit”) in Committee for a Better Arvin v. EPA, the EPA has since approved mobile source regulations for which waiver authorizations have been issued as revisions to the California SIP.47

CARB's mobile source program extends beyond regulations that are subject to the waiver or authorization process set forth in CAA section 209 to include standards and other requirements to control emissions from in-use heavy-duty trucks and buses, gasoline and diesel fuel specifications, and many other types of mobile sources. Generally, these regulations have been submitted and approved as revisions to the California SIP.48

While all of the identified State control measures contribute to some degree to attainment of the 2008 ozone standards in the San Joaquin Valley, some measures are identified in particular in the 2016 Ozone Plan as providing significant emissions reductions relied upon for attainment of the 2008 ozone standards. These measures include the On-Road Heavy-Duty Diesel In-Use Regulation, the Low Emission Vehicle III and Zero Emission Vehicle Regulation, and the Heavy-Duty Truck Idling Requirements.49

The 2016 Ozone Plan concludes that, in light of the comprehensiveness and stringency of CARB's mobile source program, all RACM for mobile sources under CARB's jurisdiction are being implemented, and that no additional measure would advance attainment of the 2008 ozone NAAQS by at least a year.

c. Local Jurisdictions' RACM Analysis and Transportation Control Measures (TCMs)

The local jurisdictions' RACM analysis was conducted by the eight MPOs in the San Joaquin Valley and is provided in Appendix D of the 2016 Ozone Plan.50 This analysis focuses on the MPOs' efforts to implement Transportation Control Measures (TCMs) as part of the adopted Congestion Mitigation and Air Quality cost-effectiveness policy and in the development of each Regional Transportation Plan (RTP). The RTPs include improvements to each component of the transportation system including: Transit, passenger rail, goods movement, aviation and airport ground access, and highways; and include TCM projects that reduce vehicle use, or change traffic flow or congestion conditions. The 2016 Ozone Plan concludes that no additional local RACM measures, beyond those measures already adopted, would advance attainment of the 2008 ozone NAAQS by at least a year.

50 These eight MPOs represent the eight counties in the San Joaquin Valley nonattainment area: The San Joaquin Council of Governments, the Stanislaus Council of Governments, the Merced County Association of Governments, the Madera County Transportation Commission, The Council of Fresno County Governments, The Kings County Association of Governments, the Tulare County Association of Governments, and the Kern Council of Governments.

3. The EPA's Review of the State's Submission

The process followed by the District in the 2016 Ozone Plan to identify RACM is generally consistent with the EPA's recommendations in the General Preamble. The process included compiling a comprehensive list of potential control measures for sources of NOX and VOC in the San Joaquin Valley.51 As part of this process, the District evaluated potential controls for all relevant source categories for economic and technological feasibility and provided justifications for the rejection of certain identified measures. The District concluded in its RACM evaluation that no additional measures, individually or in combination, could advance attainment by one year.

51See Appendix C of the 2016 Ozone Plan.

We have reviewed the District's determination in the 2016 Ozone Plan that its stationary and area source control measures represent RACM for NOX and VOC. In our review, we also considered our previous evaluations of the District's rules in connection with our approval of the San Joaquin Valley Reasonably Available Control Technology (RACT) SIP demonstration for the 2008 ozone NAAQS.52 Based on this review, we believe the District's rules provide for the implementation of RACM for stationary and area sources of NOX and VOC.

52See 83 FR 41006 (August 17, 2018).

With respect to mobile sources, we recognize CARB as a leader in the development and implementation of stringent control measures for on-road and off-road mobile sources, and its current program addresses the full range of mobile sources in the San Joaquin Valley through regulatory programs for both new and in-use vehicles. With respect to transportation controls, we note that the MPOs have a program to fund cost-effective TCMs. Overall, we believe that the programs developed and administered by CARB and the MPOs provide for the implementation of RACM for NOX and VOC in the San Joaquin Valley.

In the 2016 Ozone Plan, the District estimated that it would take a reduction of 2.7 tpd of NOX to advance attainment by one year from 2031 to 2030.53 Based on our review of the results of these RACM analyses, we agree with the State's and District's conclusion that there are no additional reasonably available measures that would advance attainment of the 2008 ozone standards in the San Joaquin Valley by at least one year. For the foregoing reasons, we propose to find that the 2016 Ozone Plan provides for the implementation of all RACM as required by CAA section 172(c)(1) and 40 CFR 51.1112(c).

53See 2016 Ozone Plan, Chapter 6, section 6.2.1.

D. Attainment Demonstration1. Statutory and Regulatory Requirements

Section 182(c)(2)(A) of the Clean Air Act requires that a plan for an ozone nonattainment area classified Serious or above include a “demonstration that the plan . . . will provide for attainment of the ozone [NAAQS] by the applicable attainment date. This attainment demonstration must be based on photochemical grid modeling or any other analytical method determined . . . to be at least as effective.” The attainment demonstration predicts future ambient concentrations for comparison to the NAAQS, making use of available information on measured concentrations, meteorology, and current and projected emissions inventories of ozone precursors, including the effect of control measures in the plan.

Areas classified Extreme for the 2008 ozone NAAQS must demonstrate attainment as expeditiously as practicable, but no later than 20 years after the effective date of designation as nonattainment. The San Joaquin Valley was designated nonattainment effective July 20, 2012, and the area must demonstrate attainment of the standards by July 20, 2032.54 An attainment demonstration must show attainment of the standards for a full calendar year before the attainment date, so in practice, Extreme nonattainment areas must demonstrate attainment in 2031.

54See 80 FR 12264.

The EPA's recommended procedures for modeling ozone as part of an attainment demonstration are contained in Modeling Guidance for Demonstrating Attainment of Air Quality Goals for Ozone, PM2.5,and Regional Haze (“Modeling Guidance”).55 The Modeling Guidance includes recommendations for a modeling protocol, model input preparation, model performance evaluation, use of model output for the numerical NAAQS attainment test, and modeling documentation. Air quality modeling is performed using meteorology and emissions from a base year, and the predicted concentrations from this base case modeling are compared to air quality monitoring data from that year to evaluate model performance. At a minimum, a model performance evaluation should include an operational evaluation, with statistics and graphical plots assessing the ability of the model to replicate observed ozone concentrations. Where possible, performance of other chemical species participating in ozone formation chemistry, such as NO2 and peroxyacetyl nitrate, should also be examined.

55Modeling Guidance for Demonstrating Attainment of Air Quality Goals for Ozone, PM2.5, and Regional Haze, December 2014 Draft, EPA OAQPS; available at https://www.epa.gov/scram/state-implementation-plan-sip-attainment-demonstration-guidance. This updates, but is largely consistent with, the earlier Guidance on the Use of Models and Other Analyses for Demonstrating Attainment of Air Quality Goals for the 8-Hour Ozone and PM2.5NAAQS and Regional Haze, EPA-454/B-07-002, April 2007. Additional EPA modeling guidance can be found in 40 CFR 51 Appendix W, Guideline on Air Quality Models, 82 FR 5182, January 17, 2017; available at https://www.epa.gov/scram/clean-air-act-permit-modeling-guidance.

To ensure that the model achieves accurate results based on relevant atmospheric phenomena, without errors that compensate each other to give just the appearance of accuracy, and to guide refinement of model inputs, it is also recommended to assess, at least to some extent, if the model correctly represents the underlying physical and chemical processes. This can be done via diagnostic evaluation, such as assessing model sensitivity to changes in inputs and process analysis. It can also be done via dynamic evaluation, such as assessing the modeled concentration change between different historical periods. Once the model performance is determined to be acceptable, future year emissions are simulated with the model. The relative (or percent) change in modeled concentration due to future emissions reductions provides a Relative Response Factor (RRF). Each monitoring site's RRF is applied to its monitored base year design value to provide the future design value for comparison to the NAAQS. The Modeling Guidance also recommends supplemental air quality analyses, which may be used as part of a Weight of Evidence (WOE) analysis. A WOE analysis corroborates the attainment demonstration by considering evidence other than the main air quality modeling attainment test, such as trends and additional monitoring and modeling analyses.

Unlike the RFP demonstration and the emissions inventory requirements, the 2008 SRR does not specify that a specific year must be used for the modeled base year for the attainment demonstration. The Modeling Guidance also does not require a particular year to be used as the base year for 8-hour ozone plans.56 The Modeling Guidance explains that the most recent year of the National Emissions Inventory may be appropriate for use as the base year for modeling, but that other years may be more appropriate when considering meteorology, transport patterns, exceptional events, or other factors that may vary from year to year.57 Therefore, the base year used for the attainment demonstration need not be the same year used to meet the requirements for emissions inventories and RFP.

56See Modeling Guidance at section 2.7.1.

57Ibid.

2. Summary of the State's Submission

CARB performed the air quality modeling for the 2016 Ozone Plan with assistance from the District. The modeling relies on a 2012 base year and demonstrates attainment in 2031. The Plan's modeling protocol is in Appendix I of the 2016 Ozone Plan and contains all the elements recommended in the Modeling Guidance. Those include: Selection of model, time period to model, modeling domain, and model boundary conditions and initialization procedures; a discussion of emissions inventory development and other model input preparation procedures; model performance evaluation procedures; selection of days and other details for calculating RRFs; and provisions for archival and access to raw model inputs and outputs.

The modeling and modeled attainment demonstration are described in Chapter 4 of the 2016 Ozone Plan and in more detail in Appendix H, which provides a description of model input preparation procedures and various model configuration options. Appendix J of the 2016 Ozone Plan provides the coordinates of the modeling domain and thoroughly describes the development of the modeling emissions inventory, including its chemical speciation, its spatial and temporal allocation, its temperature dependence, and quality assurance procedures. The modeling analysis used version 5 of the Community Multiscale Air Quality (CMAQ) photochemical model, developed by the EPA. The 2007 version of the State-wide Air Pollution Research Center chemical mechanism (SAPRC07) was used within CMAQ. SAPRC07 is an update to a mechanism that has been used for the San Joaquin Valley and other areas of the US, and it has been peer-reviewed as discussed in the protocol. To prepare meteorological input for CMAQ, the Weather and Research Forecasting model version 3.6 (WRF) from the National Center for Atmospheric Research was used. The overall WRF meteorological modeling domain covers California's neighboring states, and major portions of the next outer ring of states, with 36-kilometer (km) resolution (i.e., grid cell size); it has nested domains with 12 km and 4 km resolution, with the latter, innermost covering the entire State of California; and it has 30 vertical layers extending up to 16 km. The overall CMAQ air quality modeling domain includes the entire State of California with 12 km resolution and a nested domain with finer 4 km resolution covering California's Central Valley, including the San Joaquin Valley; and it has 18 vertical layers that overlap the WRF layers. The WRF modeling uses routinely available meteorological and air quality data collected during 2012. Those data cover May through September, a period that spans the period of highest ozone concentrations in the San Joaquin Valley. Two analyses in the WOE analysis in Appendix K section 4 provide the justification for the choice of 2012 as model base year, based on ozone concentrations and various meteorological measures of the ozone forming potential of candidate years 2010-2013. CMAQ and WRF are both recognized in the Modeling Guidance as technically sound, state-of-the-art models. The areal extent and the horizontal and vertical resolution used in these models were adequate for modeling San Joaquin Valley ozone.

The WRF meteorological model results and performance statistics are described in Appendix H, section 3.2. Supplemental figures S.1-S.20 provide hourly time series graphs of wind speed, direction, and temperature for the Northern, Central, and Southern sub-regions of the San Joaquin Valley for each month that was modeled. The modeling shows a positive bias in wind speed, and various biases in temperature (negative in Southern & Central, positive in Northern) and in humidity (opposite direction to temperature).58 These biases are also seen in the hourly supplemental figures. For example, peak wind speeds are often higher than observed (positive bias) but the overprediction decreases at moderate and low wind speeds and in the later months of the simulation, while the overall diurnal pattern matches consistently. At first glance the biases in wind speed and in relative humidity seem large relative to their base values.59 However, the 2016 Ozone Plan states that the bias and error are relatively small and are comparable to those seen in previous meteorological modeling of central California and cited in the 2016 Ozone Plan. The 2016 Ozone Plan compared statistics for wind speed, relative humidity, and temperature to benchmarks from a study cited in the Modeling Guidance. The comparison shows that the mean bias in the 2016 Ozone Plan's meteorological modeling is on the high side but within the benchmarks, the mean error is lower, and the Index of Agreement 60 is quite good, especially for temperature. The Modeling Guidance cautions against using comparisons to performance benchmarks as pass/fail tests, and stresses their use in assessing general confidence and in guiding refinement of model inputs when statistics fall outside benchmark ranges.61 In summary, the 2016 Ozone Plan's meteorological modeling performance statistics appear satisfactory.

60 The Index of Agreement is a statistical metric. See page 47 of the Modeling Protocol to the 2016 Ozone Plan.

61See page 30 of the Modeling Guidance.

As recommended in the Modeling Guidance, the 2016 Ozone Plan also provided a phenomenological evaluation of the meteorological modeling, assessing its ability to replicate qualitative features of the area's meteorological phenomena that could be important for ozone concentrations. The 2016 Ozone Plan's evaluation confirmed that the model was able to capture important phenomena such as up-slope and down-slope flows in the mountain ranges surrounding the Central Valley, and the split in flow toward north and south as winds enter the Central Valley through the Sacramento River delta area.

Ozone model performance statistics are described in the 2016 Ozone Plan at Appendix H, section 5.2. That section includes tables of statistics recommended in the Modeling Guidance for 8-hour and 1-hour daily maximum ozone for the three San Joaquin Valley sub-regions. Supplemental figures S.21-S.102 provide frequency distributions, scatterplots, and hourly time series graphs of ozone concentrations for each of the 25 monitors located in the San Joaquin Valley. The supplemental hourly time series show generally good performance, though many individual daily ozone peaks are underpredicted. This is confirmed by the ozone frequency distributions (e.g., figure S.1), scatter plots (e.g., figure S.22), and plots of bias against concentration (e.g., figure S.25). The highest concentrations also have the largest negative bias. The 2016 Ozone Plan states that the performance statistics are comparable to those seen in previous modeling of ozone in central California and cited in the 2016 Ozone Plan. It also found the statistics to be within the ranges for other modeling applications discussed in a study cited by the Modeling Guidance. The 2016 Ozone Plan's corresponding graphic (figure 11) shows that for negative bias (underprediction), the 2016 Ozone Plan's modeling is among the poorer performing in the range, but for overall error it is among the best performing. Note that, because only relative changes are used from the modeling, the underprediction of absolute ozone concentrations does not mean that future concentrations will be underestimated.

As noted in the 2016 Ozone Plan's modeling protocol, the Modeling Guidance recognizes that limited time and resources can constrain the extent of the diagnostic and dynamic evaluation of model performance undertaken.62 No diagnostic evaluation, as that term is used in the Modeling Guidance, was described in the 2016 Ozone Plan. Appendix H to the 2016 Ozone Plan includes section 5.2.1 entitled “Diagnostic Evaluation,” though it actually describes a dynamic evaluation in which model predictions of ozone concentrations for weekdays and weekends were compared to each other and to observed concentrations. Since NOX emissions are substantially less on weekends, these comparisons provide useful information on how the model responds to emission changes. The 2016 Ozone Plan notes that for the modeled year 2012, the model-predicted relationship of weekday and weekend concentrations tends to match the observed (i.e., the predicted amount of “weekend effect,” or increase in weekend ozone despite decrease in NOX emissions, matches the observed concentrations). The modeled weekend response is also consistent with an independent analysis cited in the 2016 Ozone Plan of the historical response of ozone to reductions in NOX.63 The dynamic evaluation provides strong evidence that the model is working well at simulating ozone and how it responds to emission changes.

62See page 51 of the Modeling Protocol to the 2016 Ozone Plan, and page 63 of the Modeling Guidance.

63See 2016 Ozone Plan Appendix K, Weight of Evidence, section 7 “Weekend Effect in the San Joaquin Valley” provides additional information on the observed concentrations and how the weekday-weekend difference has changed over the years. Section 9 “Corroborating Studies” provides additional information on the trend in ozone formation regime.

As for meteorological performance, the Modeling Guidance cautions against pass/fail tests, in favor of an overall confidence assessment and identification of causes of poor performance to help guide refinement of model input.64 Confidence in the model's ability to correctly simulate emission changes would have been enhanced if the 2016 Ozone Plan had discussed any input refinement and performance improvement process that was undertaken, and if it had provided some performance assessment of non-ozone chemical species participating in ozone formation chemistry. The 2016 Ozone Plan contains a good operational evaluation showing good model performance, and also a useful dynamic evaluation. Some diagnostic evaluations as described in the Modeling Guidance would have provided additional confidence in the model. The information provided in the 2016 Ozone Plan supports the adequacy of the modeling for the attainment demonstration.

64 See Modeling Guidance, pages 62-63.

After model performance for the 2012 base case was accepted, the model was applied to develop RRFs for the attainment demonstration.65 This entailed running the model with the same meteorological inputs as before, but with adjusted emissions inventories to reflect the expected changes between 2012 and the 2031 attainment year. These modeling inventories excluded “emissions events which are either random and/or cannot be projected to the future . . . wildfires, . . . and the [San Francisco Bay Area] Chevron refinery fire.” 66 The base year or “reference year” modeling inventory was the same as the inventory for the modeling base case except for these exclusions. The 2031 inventory projects the base year with these exclusions into the future by including the effect of economic growth and emissions control measures.67 To include the fires in the base year but not the future year would effectively credit the 2016 Ozone Plan's control measures with eliminating emissions from the fire; therefore, it makes more sense to treat the base year and future year consistently with respect to fire or other unpredictable emissions events. The Modeling Guidance recommends that day-specific wildfire emissions be used in modeling of both base and future years, possibly with spatial and temporal averaging to create “average” fire emissions that avoid acute effects from large fires, but it also notes that other approaches may be appropriate.68 The 2016 Ozone Plan's approach of excluding wildfires altogether avoids uncertainties in fire emissions and meteorology. It has the drawback that the model response to 2012-2031 emission changes does not reflect the effect of wildfires, which occur in most years and could affect the atmospheric chemistry and its response to those emission changes. The approach used in the 2016 Ozone Plan is reasonable, but would be stronger with a more complete rationale in the modeling protocol or the Plan documentation.

65See 2016 Ozone Plan, section 4.4, and Appendix H, section 4.2.

66See 2016 Ozone Plan, Appendix H, page H-11.

67 In general, the “reference year” could be a different calendar year than the modeling base case. The base case modeling replicates a particular year's measured concentrations using that same year's meteorology and emissions. Modeling of e.g., a regulatorily required year used as the reference year would still use the same meteorology, but emissions from the required year.

68See Modeling Guidance, page 53.

The 2016 Ozone Plan carried out the attainment test procedure consistent with the Modeling Guidance. The RRFs were calculated as the ratio of future to base year concentrations. This was done for each monitor using the top 10 ozone days over 0.060 ppm,69 using the base year concentration in the highest of the three by three modeling grid cells centered on the monitor, and the future concentration from the same day and grid cell, with some exclusions, e.g., if there were too few days above 0.060 ppm. The resulting RRFs were then applied to 2012 weighted base year design values 70 for each monitor to arrive at 2031 future year design values.71 The highest 2031 ozone design value is 0.074 ppm, which occurs at the Clovis-N Villa Avenue site; this is below the 2008 8-hr ozone NAAQS of 0.075 ppm, thus demonstrating attainment.

69 The Modeling Guidance and the 2016 Ozone Plan state concentrations in terms of parts per billion.

70 The Modeling Guidance recommends that RRFs be applied to the average of three three-year design values centered on the base year, in this case the design values for 2010-2012, 2011-2013, and 2012-2015. This amounts to a 5-year weighted average of individual year 4th high concentrations, centered on the base year of 2012, and so is referred to as a weighted design value.

71See 2016 Ozone Plan, tables 4-4 and H-13.

The 2016 Ozone Plan includes an additional attainment demonstration using “banded” RRFs.72 The banded approach is described more fully in a study cited in the 2016 Ozone Plan. The underlying idea is to divide ozone concentrations into ranges or bands and compute RRFs for each band separately. This allows different ozone concentrations to respond differently to emission changes. The Modeling Guidance procedure instead assumes that the relative response is the same for all ozone concentrations. The banded RRF approach is a reasonable refinement, since higher concentrations generally are more responsive to emissions changes.73 This approach was used in the 2013 1-hour Ozone San Joaquin Valley Plan approved by the EPA, and it is cited by the Modeling Guidance as an alternative approach.74 In this case, the banded approach increased design values for some monitors and decreased them for others; for Clovis, the site with the highest 2031 design value, the design value decreased from 0.074 ppm to 0.072 ppm. This provides corroboration for the attainment demonstration.

Finally, the 2016 Ozone Plan modeling includes an “Unmonitored Area Analysis” to assess the attainment status of locations other than monitoring sites.75 The Modeling Guidance describes a “gradient adjusted spatial fields” procedure along with the EPA software (“Modeled Attainment Test Software” or MATS) used to carry it out.76 This procedure uses a form of interpolation, combining monitored concentrations and modeled gradients (modeled changes in concentration with distance from a monitor) to estimate future concentrations at locations without a monitor. The 2016 Ozone Plan states that an Unmonitored Area Analysis was carried out using software developed by CARB. The procedure was described to be the same as that outlined in the Modeling Guidance, with the exception that it was restricted to locations spanned by monitors (i.e., within a convex shape enclosing the monitors) rather than extrapolating beyond to the full rectangular modeling domain as in the EPA procedure. The stated reason for this restriction is that it avoids the inherent uncertainty associated with extrapolation outside the monitoring network. Most of the nonattainment area is nevertheless covered in the analysis, since there are monitors outside the San Joaquin Valley nonattainment area. However, a strip along the eastern edge, from the foothills to the crest of the Sierra Nevada mountains, is not included in the analysis.77 The method used is an improvement over the simpler interpolation used in some previous plans. The 2016 Ozone Plan states that the results showed concentrations below the NAAQS for all locations, with concentrations under 70 ppb except for small regions near Tracy and Fresno. This Unmonitored Area Analysis supports the demonstration that all locations in the San Joaquin Valley will attain the NAAQS by 2031.

75See 2016 Ozone Plan, Appendix H, section 5.4.

76See section 4.7 of the Modeling Guidance.

77See 2016 Ozone Plan, figure J-14.

In addition to the formal attainment demonstration, the Plan also contains a WOE analysis in Appendix K. Some of the contents of Appendix K have already been discussed above, e.g., section 4 “Suitability of 2012 as a Base Year for Modeling”, section 7 “Weekend Effect in the San Joaquin Valley,” section 8 “Modeled Attainment Projections” with a comparison of the standard attainment demonstration RRFs and the band RRFs emissions reductions. These all add support and corroboration for the modeling used in the attainment demonstration and the credibility of attainment in 2031. Other sections also add support to the attainment demonstration, mainly by showing long term downward trends that continue through 2014, the latest year available prior to 2016 Ozone Plan development. Downward trends are demonstrated for measured ozone concentrations, number of days above the ozone NAAQS, measured concentrations of the ozone precursors NOX and VOC, and emissions of NOX and VOC. The downward measured ozone trends are seen even when they are adjusted for meteorology (using Classification and Regression Trees to identify the meteorological variables that affect ozone, followed by multiple regression of ozone on those variables). These all show the substantial air quality progress made in the San Joaquin Valley and add support to the attainment demonstration for 2031.

3. The EPA's Review of the State's Submission

The modeling shows that existing CARB and District control measures are sufficient to attain the 2008 8-hour Ozone NAAQS by 2031 at all monitoring sites in the San Joaquin Valley. Given the extensive discussion of modeling procedures, tests, and performance analyses called for in the Modeling Protocol and the good model performance, the EPA finds that the modeling is adequate for purposes of supporting the attainment demonstration. The EPA finds that the State has demonstrated attainment of the NAAQS by the applicable attainment date, and we propose to approve the attainment demonstration provided in the 2016 Ozone Plan.

Requirements for RFP are specified in CAA sections 172(c)(2), 182(b)(1), and 182(c)(2)(B). CAA section 172(c)(2) requires that plans for nonattainment areas provide for RFP, which is defined as such annual incremental reductions in emissions of the relevant air pollutant as are required under part D (“Plan Requirements for Nonattainment Areas”) or may reasonably be required by the EPA for the purpose of ensuring attainment of the applicable NAAQS by the applicable date. CAA section 182(b)(1) specifically requires that ozone nonattainment areas that are classified as Moderate or above demonstrate a 15 percent reduction in VOC between the years of 1990 and 1996. The EPA has typically referred to section 182(b)(1) as the Rate of Progress (ROP) requirement. For ozone nonattainment areas classified as Serious or higher, section 182(c)(2)(B) requires reductions averaged over each consecutive 3-year period beginning 6 years after the baseline year until the attainment date of at least 3 percent of baseline emissions per year. The provisions in CAA section 182(c)(2)(B)(ii) allow an amount less than 3 percent of such baseline emissions each year if the state demonstrates to the EPA that the plan includes all measures that can feasibly be implemented in the area in light of technological achievability.

The 2008 Ozone SRR considers areas classified Moderate or higher to have met the ROP requirements of CAA section 182(b)(1) if the area has a fully approved 15 percent ROP plan for the 1-hour or 1997 8-hour ozone standards, provided the boundaries of the ozone nonattainment areas are the same.78 For such areas, the RFP requirements of CAA section 172(c)(2) require areas classified as Moderate to provide a 15 percent emission reduction of ozone precursors within 6 years of the baseline year. Areas classified as Serious or higher must meet the RFP requirements of CAA section 182(c)(2)(B) by providing an 18 percent reduction of ozone precursors in the first 6-year period, and an average ozone precursor emission reduction of 3 percent per year for all remaining 3-year periods thereafter.79 Under the CAA 172(c)(2) and CAA 182(c)(2)(B) RFP requirements, NOX emissions reductions may be substituted for VOC reductions.80

Except as specifically provided in CAA section 182(b)(1)(C), emissions reductions from all SIP-approved, federally promulgated, or otherwise SIP-creditable measures that occur after the baseline are creditable for purposes of demonstrating that the RFP targets are met. Because the EPA has determined that the passage of time has caused the effect of certain exclusions to be de minimis, the RFP demonstration is no longer required to calculate and specifically exclude reductions from measures related to motor vehicle exhaust or evaporative emissions promulgated by January 1, 1990; regulations concerning Reid vapor pressure promulgated by November 15, 1990; measures to correct previous RACT requirements; and, measures required to correct previous inspection and maintenance (I/M) programs.81

81See 40 CFR 51.1110(a)(7).

The 2008 Ozone SRR requires the RFP baseline year to be the most recent calendar year for which a complete triennial inventory is required to be submitted to the EPA (i.e., 2011), but it also allows states to use an alternative baseline year between 2008 and 2012 if the state demonstrates why the alternative baseline year is appropriate.82 As discussed previously, in the South Coast decision issued on February 16, 2018, the D.C. Circuit upheld the EPA's RFP baseline year based on the year of the most recent triennial emissions inventory (i.e., 2011), but it vacated the provisions of the 2008 Ozone SRR that allowed states to justify and use an alternative baseline year between 2008 and 2012 for demonstrating RFP because the EPA had not provided a statutory basis for allowing use of alternative baseline years. On April 20, 2018, the South Coast Air Quality Management District submitted a petition for rehearing on the RFP baseline year issue, arguing that 2012 has a valid statutory basis because it was the year of designation for the 2008 Ozone NAAQS.83

The 2016 Ozone Plan addresses the 15 percent ROP requirement by noting that the EPA approved a 15 percent ROP plan for the 1-hour ozone NAAQS for the San Joaquin Valley in 1997, and that the 1-hour ozone nonattainment area covers the entire nonattainment area for the 2008 ozone standards.84

To address the RFP requirements, the 2016 Ozone Plan selected 2012 as the RFP baseline year and provided emissions inventories for the RFP baseline, milestone and attainment years.85 The RFP demonstration in the 2016 Ozone Plan uses NOX substitution beginning in milestone year 2018 to meet VOC emission targets and concluded that the RFP demonstration meets the applicable requirements for each milestone year and the attainment year.

85See the discussion beginning on page 6-10 and table 6-3.

3. The EPA's Review of the State's Submission

We have reviewed the 2016 Ozone Plan and agree that the EPA has approved a 15 percent ROP demonstration for the 1-hour ozone NAAQS, fulfilling the requirements of CAA section 182(b)(1).86

86See 62 FR 1150, at 1183 (January 8, 1997).

For the RFP requirements under CAA sections 172(c)(2) and 182(c)(2)(B), the Ozone SRR established 2011 as the RFP baseline year. As discussed previously, the D.C. Circuit vacated provisions of the 2008 Ozone SRR allowing states to use an alternative RPF baseline year between 2008 and 2012 in lieu of 2011. Because the 2016 Ozone Plan used 2012 as the RFP baseline year, we are not taking action at this time on the RFP demonstration in the 2016 Ozone Plan.

F. Transportation Control Strategies and Measures To Offset Emissions Increases From Vehicle Miles Traveled1. Statutory and Regulatory Requirements

Section 182(d)(1)(A) of the Act requires the state, if subject to its requirements for a given area, to submit a revision that identifies and adopts specific enforceable transportation control strategies and transportation control measures to offset any growth in emissions from growth in vehicle miles traveled (VMT) or number of vehicle trips in such area.87

87 CAA section 182(d)(1)(A) includes three separate elements. In short, under section 182(d)(1)(A), states are required to adopt transportation control strategies and measures (1) to offset growth in emissions from growth in VMT, and, (2) in combination with other emission reduction requirements, to demonstrate RFP, and (3) to demonstrate attainment. For more information on the EPA's interpretation of the three elements of section 182(d)(1)(A), please see 77 FR 58067, at 58068 (September 19, 2012) (proposed withdrawal of approval of South Coast VMT emissions offset demonstrations).

In Association of Irritated Residents v. EPA, the Ninth Circuit ruled that additional transportation control measures are required whenever vehicle emissions are projected to be higher than they would have been had VMT not increased, even when aggregate vehicle emissions are actually decreasing.88 In response to the Ninth Circuit's decision, the EPA issued a memorandum titled “Guidance on Implementing Clean Air Act Section 182(d)(1)(A): Transportation Control Measures and Transportation Control Strategies to Offset Growth in Emissions Due to Growth in Vehicle Miles Travelled” (herein referred to as the “August 2012 guidance”).89

The August 2012 guidance discusses the meaning of Transportation Control Strategies (TCSs) and Transportation Control Measures (TCMs) and recommends that both TCSs and TCMs be included in the calculations made for the purpose of determining the degree to which any hypothetical growth in emissions due to growth in VMT should be offset. Generally, TCSs encompass many types of controls including, for example, motor vehicle emissions limitations, I/M programs, alternative fuel programs, other technology-based measures, and TCMs, that would fit within the regulatory definition of “control strategy.” 90 Such measures include, but are not limited to, those listed in CAA section 108(f). TCMs generally refer to programs intended to reduce VMT, the number of vehicle trips, or traffic congestion, including, e.g., programs for improved public transit, designation of certain lanes for passenger buses and high-occupancy vehicles, and trip reduction ordinances.

90See, e.g., 40 CFR 51.100(n). TCMs are defined at 40 CFR 51.100(r) as meaning any measure that is directed toward reducing emissions of air pollutants from transportation sources.

The August 2012 guidance explains how states may demonstrate that the VMT emissions offset requirement is satisfied in conformance with the Ninth Circuit's ruling. The August 2012 guidance recommends that states estimate emissions for the nonattainment area's base year and attainment year. One emissions inventory is developed for the base year, and three different emissions inventory scenarios are developed for the attainment year. For the attainment year, the state would present three emissions estimates, two of which would represent hypothetical emissions scenarios that would provide the basis to identify the growth in emissions due solely to the growth in VMT, and one that would represent projected actual motor vehicle emissions after fully accounting for projected VMT growth and offsetting emissions reductions obtained by all creditable TCSs and TCMs. See the August 2012 guidance for specific details on how states might conduct the calculations.

The base year on-road VOC emissions should be calculated using VMT in that year, and should reflect all enforceable TCSs and TCMs in place in the base year. This would include vehicle emissions standards, state and local control programs, such as I/M programs or fuel rules, and any additional implemented TCSs and TCMs that were already required by or credited in the SIP as of that base year.

The first of the emissions calculations for the attainment year would be based on the projected VMT and trips for that year and assume that no new TCSs or TCMs beyond those already credited in the base year inventory have been put in place since the base year. This calculation demonstrates how emissions would hypothetically change if no new TCSs or TCMs were implemented, and VMT and trips were allowed to grow at the projected rate from the base year. This estimate would show the potential for an increase in emissions due solely to growth in VMT and trips. This represents a “no action” scenario. Emissions in the attainment year in this scenario may be lower than those in the base year due to fleet turnover; however, if VMT and/or numbers of vehicle trips are projected to increase in the attainment year, emissions would still likely be higher than if VMT had held constant.

The second of the attainment year's emissions calculations would assume that no new TCSs or TCMs beyond those already credited have been put in place since the base year, but it would also assume that there was no growth in VMT and trips between the base year and attainment year. This estimate reflects the hypothetical emissions level that would have occurred if no further TCMs or TCSs had been put in place and if VMT and trip levels had held constant since the base year. Like the “no action” attainment year estimate described above, emissions in the attainment year may be lower than those in the base year due to fleet turnover, but in this case emissions would not be influenced by any growth in VMT or trips. This emissions estimate would reflect a ceiling on the attainment emissions that should be allowed to occur under the statute as interpreted by the Ninth Circuit because it shows what would happen under a scenario in which no offsetting TCSs or TCMs have yet been put in place and VMT and trips are held constant during the period from the area's base year to its attainment year. This represents a “VMT offset ceiling” scenario. These two hypothetical status quo estimates are necessary steps in identifying the target level of emissions from which states determine whether further TCMs or TCSs, beyond those that have been adopted and implemented in reality, would need to be adopted and implemented in order to fully offset any increase in emissions due solely to VMT and trips identified in the “no action” scenario.

Finally, the state would present the emissions that are actually expected to occur in the area's attainment year after taking into account reductions from all enforceable TCSs and TCMs that in reality were put in place after the baseline year. This estimate would be based on the VMT and trip levels expected to occur in the attainment year (i.e., the VMT and trip levels from the first estimate) and all of the TCSs and TCMs expected to be in place and for which the SIP will take credit in the area's attainment year, including any TCMs and TCSs put in place since the base year. This represents the “projected actual” attainment year scenario. If this emissions estimate is less than or equal to the emissions ceiling that was established in the second of the attainment year calculations, the TCSs or TCMs for the attainment year would be sufficient to fully offset the identified hypothetical growth in emissions.

If, instead, the estimated projected actual attainment year emissions are still greater than the ceiling that was established in the second of the attainment year emissions calculations, even after accounting for post-baseline year TCSs and TCMs, the state would need to adopt and implement additional TCSs or TCMs to further offset the growth in emissions. The additional TCSs or TCMs would need to bring the actual emissions down to at least the “had VMT and trips held constant” ceiling estimated in the second of the attainment year calculations, in order to meet the VMT offset requirement of section 182(d)(1)(A) as interpreted by the Ninth Circuit.

2. Summary of the State's Submission

CARB prepared the San Joaquin Valley VMT emissions offset demonstration, which is included as section D.3 (“VMT Offsets”) of Appendix D (“Mobile Source Control Strategy”) of the 2016 Ozone Plan. For the demonstration, CARB used EMFAC2014, the latest EPA-approved motor vehicle emissions model for California. The EMFAC2014 model estimates the on-road emissions from two combustion processes (i.e., running exhaust and start exhaust) and four evaporative processes (i.e., hot soak, running losses, diurnal losses, and resting losses). The EMFAC2014 model combines trip-based VMT data from the eight San Joaquin Valley MPOs (e.g., Council of Fresno County Governments), starts data based on household travel surveys, and vehicle population data from the California Department of Motor Vehicles. These sets of data are combined with corresponding emission rates to calculate emissions.

Emissions from running exhaust, start exhaust, hot soak, and running losses are a function of how much a vehicle is driven. As such, emissions from these processes are directly related to VMT and vehicle trips, and CARB included emissions from them in the calculations that provide the basis for the San Joaquin Valley VMT emissions offset demonstration. CARB did not include emissions from resting loss and diurnal loss processes in the analysis because such emissions are related to vehicle population, not to VMT or vehicle trips, and thus are not part of “any growth in emissions from growth in vehicle miles traveled or numbers of vehicle trips in such area” (emphasis added) under CAA section 182(d)(1)(A).

The San Joaquin Valley VMT emissions offset demonstration uses 2012 as the base year and also includes the previously described three different attainment year scenarios (i.e., no action, VMT offset ceiling, and projected actual). The San Joaquin Valley 2016 Ozone Plan provides a demonstration of attainment of the 2008 8-hour ozone standards in the San Joaquin Valley by December 31, 2031, based on emissions projections for year 2031 reflecting adopted controls. As described in section III.D of this notice, the EPA is proposing to approve this attainment demonstration. Accordingly, we find CARB's selection of year 2031 as the attainment year for the VMT emissions offset demonstration for the 8-hour ozone NAAQS to be appropriate.

Table 3 summarizes the relevant distinguishing parameters for each of the emissions scenarios and shows CARB's corresponding VOC emissions estimates for the demonstration for the 2008 8-hour ozone NAAQS.

For the base year scenario, CARB ran the EMFAC2014 model for the applicable base year (i.e., 2012 for the 2008 8-hour ozone standards) using VMT and starts data corresponding to that year. As shown in table 3, CARB estimates the San Joaquin Valley VOC emissions at 50 tpd in 2012.

For the “no action” scenario, CARB first identified the on-road motor vehicle control programs (i.e., TCSs or TCMs) put in place since the base year and incorporated into EMFAC2014 and then ran EMFAC2014 with the VMT and starts data corresponding to the applicable attainment year (i.e., 2031 for the 2008 8-hour ozone standards) without the emissions reductions from the on-road motor vehicle control programs put in place after the base year. Thus, the no action scenario reflects the hypothetical VOC emissions that would occur in the attainment year in the San Joaquin Valley if CARB had not put in place any additional TCSs or TCMs after 2012. As shown in table 3, CARB estimates the no action San Joaquin Valley VOC emissions at 22 tpd in 2031.

For the “VMT offset ceiling” scenario, CARB ran the EMFAC2014 model for the attainment years but with VMT and starts data corresponding to base year values. Like the no action scenarios, the EMFAC2014 model was adjusted to reflect the VOC emissions levels in the attainment years without the benefits of the post-base-year on-road motor vehicle control programs. Thus, the VMT offset ceiling scenario reflects hypothetical VOC emissions in the San Joaquin Valley if CARB had not put in place any TCSs or TCMs after the base year and if there had been no growth in VMT or vehicle trips between the base year and the attainment year.

The hypothetical growth in emissions due to growth in VMT and trips can be determined from the difference between the VOC emissions estimates under the no action scenario and the corresponding estimates under the VMT offset ceiling scenario. Based on the values in table 3, the hypothetical growth in emissions due to growth in VMT and trips in the San Joaquin Valley would have been 5 tpd (i.e., 22 tpd minus 17 tpd) for purposes of the revised VMT emissions offset demonstration for the 8-hour ozone standards. This hypothetical difference establishes the level of VMT growth-caused emissions that need to be offset by the combination of post-baseline year TCMs and TCSs and any necessary additional TCMs and TCSs.

For the “projected actual” scenario calculation, CARB ran the EMFAC2014 model for the attainment year with VMT and starts data at attainment year values and with the full benefits of the relevant post-baseline year motor vehicle control programs. For this scenario, CARB included the emissions benefits from TCSs and TCMs put in place since the base year. The most significant measures reducing VOC emissions during the 2012 to 2031 timeframe include the Advanced Clean Cars program, Low Emission Vehicles II and III standards, Zero Emissions Vehicle standards, On-Board Diagnostics, Smog Check Improvements, and California Reformulated Gasoline Phase 3.91

As shown in table 3, the calculation of the projected actual attainment-year VOC emissions resulted in 14 tpd for the 2008 8-hour ozone NAAQS demonstration. CARB then compared this value against the corresponding VMT offset ceiling value to determine whether additional TCMs or TCSs would need to be adopted and implemented in order to offset any increase in emissions due solely to VMT and trips. Because the projected actual emissions are less than the corresponding VMT offset ceiling emissions, CARB concluded that the demonstration shows compliance with the VMT emissions offset requirement and that there are sufficient adopted TCSs and TCMs to offset the growth in emissions from the growth in VMT and vehicle trips in the San Joaquin Valley for the 2008 8-hour standards. In fact, taking into account the creditable post-baseline year TCMs and TCSs, CARB showed that they offset the hypothetical difference by 8 tpd for the 2008 8-hour standards, rather than the required 5 tpd, respectively.92

92 The offsetting VOC emissions reductions from the TCSs and TCMs put in place after the respective base year can be determined by subtracting the projected actual emissions estimates from the no action emissions estimates in table 3. For the purposes of the 2008 8-hour ozone demonstration, the offsetting emissions reductions (i.e., 8 tpd based on 22 tpd minus 14 tpd) exceed the growth in emissions from growth in VMT and vehicle trips (i.e., 5 tpd based on 22 tpd minus 17 tpd).

3. The EPA's Review of the State's Submission

Based on our review of the San Joaquin Valley VMT emissions offset demonstration in Appendix D of the 2016 Ozone Plan, we find CARB's analysis to be acceptable and agree that CARB has adopted sufficient TCSs and TCMs to offset the growth in emissions from growth in VMT and vehicle trips in the San Joaquin Valley for the purposes of the 2008 8-hour ozone standards. As such, we find that the San Joaquin Valley VMT emissions offset demonstration complies with the VMT emissions offset requirement in CAA section 182(d)(1)(A). Therefore, we propose approval of the San Joaquin Valley VMT emissions offset demonstration portion of the 2016 Ozone Plan.

G. Contingency Measures To Provide for RFP and Attainment1. Statutory and Regulatory Requirements

Under the CAA, 8-hour ozone nonattainment areas classified under subpart 2 as Moderate or above must include in their SIPs contingency measures consistent with sections 172(c)(9) and 182(c)(9). Contingency measures are additional controls or measures to be implemented in the event the area fails to make reasonable further progress or to attain the NAAQS by the attainment date. The SIP should contain trigger mechanisms for the contingency measures, specify a schedule for implementation, and indicate that the measure will be implemented without significant further action by the state or the EPA.93

Neither the CAA nor the EPA's implementing regulations establish a specific level of emissions reductions that implementation of contingency measures must achieve, but the EPA's 2008 Ozone SRR reiterates the EPA's policy that contingency measures should provide for emissions reductions approximately equivalent to one year's worth progress, amounting to reductions of 3 percent of the baseline emissions inventory for the nonattainment area.94

94 80 FR 12264 at 12285 (March 6, 2015).

It has been the EPA's longstanding interpretation of section 172(c)(9) that states may rely on federal measures (e.g., federal mobile source measures based on the incremental turnover of the motor vehicle fleet each year) and local measures already scheduled for implementation that provide emissions reductions in excess of those needed to provide for RFP or expeditious attainment. The key is that the statute requires that contingency measures provide for additional emissions reductions that are not relied on for RFP or attainment and that are not included in the RFP or attainment demonstrations as meeting part or all of the contingency measure requirements. The purpose of contingency measures is to provide continued emissions reductions while the plan is being revised to meet the missed milestone.

The EPA has approved numerous SIPs under this interpretation—i.e., SIPs that use as contingency measures one or more federal or local measures that are in place and provide reductions that are in excess of the reductions required by the attainment demonstration or RFP plan,95 and there is case law supporting the EPA's interpretation in this regard.96 However, in Bahr v. EPA, the Ninth Circuit rejected the EPA's interpretation of CAA section 172(c)(9) as allowing for early implementation of contingency measures.97 The Ninth Circuit concluded that contingency measures must take effect at the time the area fails to make RFP or attain by the applicable attainment date, not before.98 Thus, within the geographic jurisdiction of the Ninth Circuit, states cannot rely on early-implemented measures to comply with the contingency measure requirements under CAA section 172(c)(9).

96See, e.g., LEAN v. EPA, 382 F.3d 575 (5th Cir. 2004) (upholding contingency measures that were previously required and implemented where they were in excess of the attainment demonstration and RFP SIP).

97Bahr v. EPA, 836 F.3d 1218, at 1235-1237 (9th Cir. 2016).

98Id. at 1235-1237.

2. Summary of the State's Submission

In its 2016 Ozone Plan, the District set aside NOX emissions reductions from the attainment demonstration and reserves those reductions to meet the contingency measure requirement for a failure to attain the 2008 ozone standards.99 Similarly, to satisfy the requirement for RFP contingency measures, the 2016 Ozone Plan sets aside 3 percent excess emissions reductions in the first RFP milestone year and reserves those reductions for contingency measures for failure to make RFP.100

99See 2016 Ozone Plan, Chapter 6, section 6.4.

100Id. at section 6.3.

3. The EPA's Review of the State's Submission

The magnitude of contingency measure reductions in the 2016 Ozone Plan is affected by the South Coast decision (regarding the appropriate baseline year for RFP) because, for ozone purposes, the required emission reductions are generally calculated as a portion of the baseline emissions inventory. For this reason, we are not taking action at this time on the contingency measures in the 2016 Ozone Plan.

H. Clean Fuels or Advanced Control Technology for Boilers1. Statutory and Regulatory Requirements

CAA section 182(e)(3) provides that SIPs for Extreme nonattainment areas require each new, modified, and existing electric utility and industrial and commercial boiler that emits more than 25 tpy of NOX to either burn as its primary fuel natural gas, methanol, or ethanol (or a comparably low-polluting fuel), or use advanced control technology, such as catalytic control technologies or other comparably effective control methods.

Additional guidance on this requirement is provided in the General Preamble at 13523. According to the General Preamble, a boiler should generally be considered as any combustion equipment used to produce steam and generally does not include a process heater that transfers heat from combustion gases to process streams.101 In addition, boilers with rated heat inputs less than 15 million British Thermal Units (MMBtu) per hour that are oil- or gas-fired may generally be considered de minimus and exempt from these requirements because it is unlikely that they will exceed the 25 tpy NOX emission limit.102

101See General Preamble, 57 FR 13498 at 13523 (April 16, 1992).

102Id at 13524.

2. Summary of the State's Submission

The 2016 Ozone Plan addresses the requirements of CAA section 182(e)(3) in section 3.17 (“Clean Fuels”) of Chapter 3, and states that District Rules 4305, 4306, and 4352 address NOX emission limits for boilers and that these rules meet the requirements of the CAA. Additional information on these rules is also provided in Appendix C of the 2016 Ozone Plan. Specifically, the 2016 Ozone Plan indicates that most of the boilers under District Rules 4305 and 4306 are fired on natural gas and, as such, meet the requirements of CAA section 182(e)(3) for those boilers subject to those rules. Liquid fuel-fired boilers are also addressed by Rule 4305 and 4306, and the 2016 Ozone Plan concludes that the applicable NOX emissions in the rules necessitate use of advanced technology. The 2016 Ozone Plan concludes likewise for solid fuel-fired boilers addressed by Rule 4352.

3. The EPA's Review of the State's Submission

Rule 4305 (now titled “Boilers, Steam Generators, and Process Heaters—Phase 2”) was adopted by the District in 1993 and was superseded by Rule 4306 (“Boilers, Steam Generators, and Process Heaters—Phase 3”). Both Rules 4305 and 4306 apply to any gaseous fuel- or liquid fuel-fired boiler, steam generator, or process heater with a rated heat input greater than 5 MMBtu per hour. Rule 4305, as amended on August 21, 2003, was approved by the EPA in 2004, and Rule 4306, as revised on October 16, 2008, was approved by the EPA in 2010.103 The emission limits in Rule 4306 (5 ppm to 30 ppm for gaseous fuels and 40 ppm for liquid fuels) cannot be achieved without the use of advanced control technologies.104 All units subject to Rule 4306 were required to comply with the limits in the rule no later than December 1, 2008.

Rule 4352, titled “Solid Fuel-Fired Boilers, Steam Generators, and Process Heaters” was last approved by the EPA on November 6, 2012.105 Rule 4352 applies to any boiler, steam generator, or process heater fired on solid fuel at a source that has the potential to emit more than 10 tpy of NOX or VOC. All units subject to Rule 4352 were required to comply with the rule's most stringent limits no later than January 1, 2013. In an EPA action on an earlier version of Rule 4352, we determined that all of the NOX emission limits in Rule 4352 effectively require operation of selective noncatalytic reduction control technology, which, for the affected sources, is comparably effective to selective catalytic reduction, and comparable to the combustion of clean fuels at these types of boilers. Therefore, we concluded that Rule 4352 satisfied the requirements of section 182(e)(3) for solid fuel-fired boilers in the San Joaquin Valley.106

In addition, new and modified boilers that will emit or have the potential to emit 25 tpy or more of NOX are subject to the District's new source permitting rule, Rule 2201, titled “New and Modified Stationary Source Review.” This rule requires new and modified sources to install and operate lowest achievable emission rate (LAER) technology. The EPA last approved Rule 2201 in 2014.107 In previous actions on the 1-hour ozone NAAQS and the 1997 8-hour ozone NAAQS, the EPA reviewed Rules 4306, 4352, and 2201, and concluded that the rules satisfy the requirements for clean fuel or advanced control technology for boilers in CAA section 182(e)(3). We find that the emission limitations in the District's rules continue to meet the clean fuel or advanced control technology for boilers requirement in CAA section 182(e)(3), and thus, we propose to approve the Clean Fuels for Boilers portion of the 2016 Ozone Plan.

Section 176(c) of the CAA requires federal actions in nonattainment and maintenance areas to conform to the SIP's goals of eliminating or reducing the severity and number of violations of the NAAQS and achieving expeditious attainment of the standards. Conformity to the SIP's goals means that such actions will not: (1) Cause or contribute to violations of a NAAQS, (2) worsen the severity of an existing violation, or (3) delay timely attainment of any NAAQS or any interim milestone.

Actions involving Federal Highway Administration (FHWA) or Federal Transit Administration (FTA) funding or approval are subject to the EPA's transportation conformity rule, codified at 40 CFR part 93, subpart A. Under this rule, MPOs in nonattainment and maintenance areas coordinate with state and local air quality and transportation agencies, the EPA, the FHWA, and the FTA to demonstrate that an area's regional transportation plans and transportation improvement programs conform to the applicable SIP. This demonstration is typically done by showing that estimated emissions from existing and planned highway and transit systems are less than or equal to the motor vehicle emissions budgets (MVEBs or “budgets”) contained in all control strategy SIPs. Budgets are generally established for specific years and specific pollutants or precursors. Ozone plans should identify budgets for on-road emissions of ozone precursors (NOX and VOC) in the area for each RFP milestone year and the attainment year, if the plan demonstrates attainment.108

108 See 40 CFR 93.12(b)(2)(i).

For motor vehicle emissions budgets to be approvable, they must meet, at a minimum, the EPA's adequacy criteria (40 CFR 93.118(e)(4) and (5)) and be approvable under all pertinent SIP requirements. To meet these requirements, the MVEBs must be consistent with the approvable attainment and RFP demonstrations and reflect all of the motor vehicle control measures contained in the attainment and RFP demonstrations.109

The EPA's process for determining adequacy of a MVEB consists of three basic steps: (1) Providing public notification of a SIP submission; (2) providing the public the opportunity to comment on the MVEB during a public comment period; and, (3) making a finding of adequacy or inadequacy.110

110See 40 CFR 93.118.

2. Summary of the State's Submission

The 2016 Ozone Plan includes budgets for the 2018, 2021, 2024, 2027, and 2030 RFP milestone years, and the 2031 attainment year. The budgets were calculated using EMFAC2014, CARB's latest approved version of the EMFAC model for estimating emissions from on-road vehicles operating in California, and reflect average summer weekday emissions consistent with the RFP milestone years and the 2031 attainment year for the 2008 8-hour ozone NAAQS.111 The conformity budgets for NOX and VOC for each county in the nonattainment area are provided in table 4 below.

111 The EPA announced the availability of the EMFAC2014 model for use in SIP development and transportation conformity in California on December 14, 2015 (80 FR 77337). The EPA's approval of the EMFAC2014 emissions model for SIP and conformity purposes was effective on the date of publication of the notice in the Federal Register.

Table 4—Budgets in the 2016 Ozone PlanMotor vehicle emissions budgets

(average summer weekday, tons per day)

County2018VOCNOX2021VOCNOX2024VOCNOX2027VOCNOX2030VOCNOX2031VOCNOXFresno8.027.76.422.25.414.14.913.24.512.64.312.5Kern (SJV)6.625.45.520.44.812.64.511.74.210.94.110.8Kings1.35.11.14.20.92.60.92.50.82.30.82.3Madera1.95.11.54.11.22.61.12.30.92.00.92.0Merced2.59.42.07.81.64.81.54.41.34.21.34.1San Joaquin5.913.04.910.34.26.93.86.23.55.73.35.5Stanislaus3.810.53.08.32.65.62.35.12.14.72.04.7Tulare3.79.52.97.22.44.72.24.11.93.81.93.7Source: Tables D-4 through D-9 of Appendix D to the 2016 Ozone Plan.3. The EPA's Review of the State's Submission

As discussed above, the MVEBs for 2018, 2021, 2024, 2027 and 2030 derive from the RFP baseline year and the associated RFP milestone years. As such, the budgets are affected by the South Coast decision, and therefore, the EPA is not taking action at this time on the budgets for these years. We plan to propose action for these MVEBs in a future rulemaking. However, in today's notice we are proposing to approve the budgets for the 2031 attainment year for transportation conformity purposes.

The EPA has previously determined that the 2031 budgets in 2016 Ozone Plan are adequate for use for transportation conformity purposes. On February 23, 2017, the EPA announced the availability of the 2016 Ozone Plan and budgets, which were available for a 30-day public comment period that ended on March 27, 2017.112 The EPA received no comments from the public. On June 13, 2017, the EPA determined the 2018, 2021, 2024, 2027, 2030 and 2031 MVEBs were adequate.113 On June 29, 2017, the notice of adequacy was published in the Federal Register.114 The new budgets became effective on July 14, 2017. After the effective date of the adequacy finding, the new budgets must be used in future transportation conformity determinations in the San Joaquin Valley area. The EPA is not required under its transportation conformity rule to find budgets adequate prior to proposing approval of them, but in this instance, we have completed the adequacy review of these budgets prior to our final action on the 2016 Ozone Plan.

In today's notice, the EPA is proposing to approve only the 2031 budgets in the 2016 Ozone Plan for transportation conformity purposes. The EPA has determined through its review of the submitted 2016 Ozone Plan that the 2031 budgets are consistent with emission control measures in the SIP and attainment in 2031 for the 2008 8-hour ozone NAAQS. For the reasons discussed in section III.D of this proposed rule, we are proposing to approve the attainment demonstration in the 2016 Ozone Plan. The 2031 budgets, as given in table 5, are consistent with the attainment demonstration, are clearly identified and precisely quantified, and meet all other applicable statutory and regulatory requirements, including the adequacy criteria in 93.118(e)(4) and (5). For these reasons, the EPA proposes to approve the budgets in table 5.

CARB has requested that we limit the duration of our approval of the budgets only until the effective date of the EPA's adequacy finding for any subsequently submitted budgets.115 The transportation conformity rule allows us to limit the approval of budgets.116 However, we will consider a state's request to limit an approval of its MVEB only if the request includes the following elements: 117

• An acknowledgement and explanation as to why the budgets under consideration have become outdated or deficient;

• A commitment to update the budgets as part of a comprehensive SIP update; and

• A request that the EPA limit the duration of its approval to the time when new budgets have been found to be adequate for transportation conformity purposes.

Because CARB's request does not include a commitment to update the budgets or an explanation of why the budgets have become outdated or deficient, we cannot at this time propose to limit the duration of our approval of the submitted budgets until new budgets have been found adequate. In order to limit the approval, we would need the information described above to determine whether such limitation is reasonable and appropriate in this case. Once CARB has adequately addressed that information, we intend to review it and take appropriate action. If we propose to limit the duration of our approval of the MVEB in the 2016 Ozone Plan, we will provide the public an opportunity to comment. The duration of the approval of the budgets, however, would not be limited until we complete such a rulemaking.

In addition to the requirements discussed above, title 1, subpart D of the CAA includes other provisions applicable to Extreme ozone nonattainment areas, such as the San Joaquin Valley. We describe these provisions and their current status below for informational purposes only.

1. Enhanced Vehicle Inspection and Maintenance Programs

Section 182(c)(3) of the CAA requires states with ozone nonattainment areas classified under subpart 2 as Serious or above to implement an enhanced motor vehicle I/M program in those areas. The requirements for those programs are provided in CAA section 182(c)(3) and 40 CFR part 51, subpart S.

Consistent with the 2008 Ozone SRR, the 2016 Ozone Plan states that no new I/M programs are currently required for nonattainment areas for the 2008 ozone standards.118 The EPA has previously approved California's I/M program in the San Joaquin Valley as meeting the requirements of the CAA and applicable EPA regulations for enhanced I/M programs.119

In accordance with CAA section 211, the federal reformulated gasoline (RFG) program requires certain areas to use gasoline that has been reformulated to reduce emissions of ozone precursors. As an Extreme ozone nonattainment area for the 1-hour ozone NAAQS, the San Joaquin Valley was included in the federal RFG program.120 As a nonattainment area for the 1997 and 2008 ozone standards, the San Joaquin Valley continues to be included in the program.121 California also has its own RFG program (i.e., California Phase III RFG, or CaRFG3), which applies within the San Joaquin Valley. The EPA approved CaRFG3 into the SIP on May 12, 2010.122 In our action proposing approval of CaRFG3, we noted that the EPA had previously determined that emissions reductions from CaRFG3 would be equal to or greater than the emissions reductions from the corresponding federal RFG program.123

120See CAA section 211(k)(10)(D).

121See 40 CFR 80.70(m)(1)(i) and 70 FR 71685 (November 29, 2005).

122See 75 FR 26653 (May 12, 2010).

123See 74 FR 33196, at 33198 (July 10, 2009).

3. New Source Review Rules

Section 182(a)(2)(C) of the CAA requires states to develop SIP revisions containing permit programs for each of its ozone nonattainment areas. The SIP revisions are to include requirements for permits in accordance with CAA sections 172(c)(5) and 173 for the construction and operation of each new or modified major stationary source for VOC and NOX anywhere in the nonattainment area.124 The 2008 Ozone SRR includes provisions and guidance for nonattainment new source review (NSR) programs.125 The EPA has previously approved the District's NSR rules into the SIP based in part on a conclusion that the rules adequately addressed the NSR requirements specific to extreme areas.126 On June 19, 2018, CARB submitted on behalf of the District a certification that the NSR program previously approved into the SIP is adequate to meet the requirements for the 2008 ozone standards.127 The EPA is proposing to approve the District's NSR certification in a separate rulemaking.128

128See EPA, “Revisions to California State Implementation Plan; South Coast Air Quality Management District, San Joaquin Valley Air Pollution Control District and Yolo-Solano Air Quality Management; Nonattainment New Source Review Requirements for the 2008 8-Hour Ozone Standard,” pre-publication final rule signed August 8, 2018.

4. Clean Fuels Fleet Program

Sections 182(c)(4)(A) and 246 of the CAA require California to submit to the EPA for approval into the SIP measures to implement a Clean Fuels Fleet Program. Section 182(c)(4)(B) of the CAA allows states to opt-out of the federal clean-fuel vehicle fleet program by submitting a SIP revision consisting of a program or programs that will result in at least equivalent long-term reductions in ozone precursors and toxic air emissions.

In 1994, CARB submitted a SIP revision to the EPA to opt-out of the federal clean-fuel fleet program, and included a demonstration that California's low-emissions vehicle program achieved emissions reductions at least as large as would be achieved by the federal program. The EPA approved the SIP revision to opt-out of the federal program on August 27, 1999.129 There have been no changes to the federal Clean Fuels Fleet program since the EPA approved the California SIP revision to opt-out of the federal program, and thus, no corresponding changes to the SIP are required. Thus, we find that the California SIP revision to opt-out of the federal program, as approved in 1999, meets the requirements of CAA sections 182(c)(4)(A) and 246 for San Joaquin Valley for the 2008 ozone standards.

129See 64 FR 46849 (August 27, 1999).

5. Gasoline Vapor Recovery

Section 182(b)(3) of the CAA requires states to submit a SIP revision by November 15, 1992, that requires owners or operators of gasoline dispensing systems to install and operate gasoline vehicle refueling vapor recovery (“Stage II”) systems in ozone nonattainment areas classified as Moderate and above. California's ozone nonattainment areas implemented Stage II vapor recovery well before the passage of the CAA Amendments of 1990.130

130See General Preamble, 57 FR 13498 at 13514 (April 16, 1992).

Section 202(a)(6) requires the EPA to promulgate standards requiring motor vehicles to be equipped with onboard refueling vapor recovery (ORVR) systems. The EPA promulgated the first set of ORVR system regulations in 1994 for phased implementation on vehicle manufacturers, and since the end of 2006, essentially all new gasoline-powered light and medium-duty vehicles are ORVR-equipped.131 Section 202(a)(6) also authorizes the EPA to waive the SIP requirement under CAA section 182(b)(3) for installation of Stage II vapor recovery systems after such time as the EPA determines that ORVR systems are in widespread use throughout the motor vehicle fleet. Effective May 16, 2012, the EPA waived the requirement of CAA section 182(b)(3) for Stage II vapor recovery systems in ozone nonattainment areas regardless of classification. See 40 CFR 51.126(b). Thus, a SIP submittal meeting CAA section 182(b)(3) is not required for the 2008 ozone standards.

131See 77 FR 28772, at 28774 (May 16, 2012).

While a SIP submittal meeting CAA section 182(b)(3) is not required for the 2008 ozone standards, under California State law (i.e., Health and Safety Code section 41954), CARB is required to adopt procedures and performance standards for controlling gasoline emissions from gasoline marketing operations, including transfer and storage operations. State law also authorizes CARB, in cooperation with local air districts, to certify vapor recovery systems, to identify defective equipment and to develop test methods. CARB has adopted numerous revisions to its vapor recovery program regulations and continues to rely on its vapor recovery program to achieve emissions reductions in ozone nonattainment areas in California.132

132See e.g., Chapter 5, table 5-4 of the 2016 Ozone Plan.

In the San Joaquin Valley, the installation and operation of CARB-certified vapor recovery equipment is required and enforced by District Rules 4621 (“Gasoline Transfer into Stationary Storage Containers, Delivery Vessels and Bulk Plants”) and 4622 (“Gasoline Transfer into Motor Vehicle Fuel Tanks”). The most recent versions of Rules 4621 and 4622, amended on December 19, 2013, have been approved into the California SIP.133

133See 80 FR 7345 (February 10, 2015).

6. Enhanced Ambient Air Monitoring

Section 182(c)(1) of the CAA requires that all ozone nonattainment areas classified as Serious or above implement measures to enhance and improve monitoring for ambient concentrations of ozone, NOX, and VOC, and to improve monitoring of emissions of NOX and VOC. The enhanced monitoring network for ozone is referred to as the Photochemical Assessment Monitoring Station (PAMS) network. The EPA promulgated final PAMS regulations on February 12, 1993.134

134See 58 FR 8452 (February 12, 1993).

On November 10, 1993, CARB submitted to the EPA a SIP revision addressing the PAMS network for six ozone nonattainment areas in California, including the San Joaquin Valley, to meet the enhanced monitoring requirements of CAA section 182(c)(1). The EPA determined that the PAMS SIP revision met all applicable requirements for enhanced monitoring and the EPA PAMS regulations and approved the PAMS submittal into the California SIP.135

135See 82 FR 45191 (September 28, 2017).

The 2016 Ozone Plan discusses compliance with the EPA's enhanced monitoring requirements in 40 CFR part 58, and concludes that, based on the EPA's approval of the District's air monitoring network plan, the San Joaquin Valley meets all federal ambient monitoring requirements.136 Chapter 4 (section 4.2.2) of the 2016 Ozone Plan describes the San Joaquin Valley's PAMS network. The District's PAMS network is composed of two smaller networks located in the Fresno and Bakersfield Metropolitan Statistical Areas (MSAs). Each network in the MSA consists of three PAMS sites. The District's July 2017 Annual Air Quality Monitoring Network Plan (ANP) also provides more detail about the PAMS network.137 The EPA has approved the District's PAMS network as part of our annual approval of the District's ANP.138

The 2016 Ozone Plan reports that the Arvin-Bear Mountain PAMS monitoring site in the Bakersfield MSA was closed in 2010, and would resume once a permanent air monitoring site in the area was established. The closed monitoring site at Arvin-Bear Mountain was relocated to a new site at the Arvin-Di Giorgio elementary school. CARB's staff report for the 2016 Ozone Plan includes, for approval by the EPA, provisions to address ambient ozone monitoring in the Bakersfield MSA.139 The EPA approved the relocation of the monitoring site and approved into the SIP these provisions of the 2016 Ozone Plan for ozone monitoring in Bakersfield.140

139See section V-H of the ARB Review of the San Joaquin Valley 2016 Plan for the 2008 8-Hour Ozone Standard, July 21, 2016.

140See 82 FR 47145 (October 11, 2017).

Prior to 2006, the EPA's ambient air monitoring regulations in 40 CFR part 58 (“Ambient Air Quality Surveillance”) set forth specific SIP requirements (see former 40 CFR 52.20). In 2006, the EPA significantly revised and reorganized 40 CFR part 58.141 Under revised 40 CFR part 58 SIP revisions are no longer required; rather, compliance with EPA monitoring regulations is established through review of required annual monitoring network plans.142 The 2008 Ozone SRR made no changes to these requirements.143 As such, based on our review and approval of the most recent ANP for San Joaquin Valley, we find that the 2016 Ozone Plan adequately addresses the enhanced monitoring requirements under CAA section 182(c)(1), and we propose to approve that portion of the Plan.

141See 71 FR 61236 (October 17, 2006).

142 40 CFR 58.2(b) now provides: The requirements pertaining to provisions for an air quality surveillance system in the SIP are contained in this part.

Section 185 of the CAA requires that the SIP for each Severe and Extreme ozone nonattainment area provide that, if the area fails to attain by its applicable attainment date, each major stationary source of VOC and NOX located in the area shall pay a fee to the state as a penalty for such failure for each calendar year beginning after the attainment date, until the area is redesignated as an attainment area for ozone. States are not yet required to submit a SIP revision that meets the requirements of CAA section 185 for the 2008 ozone NAAQS.144

144See 40 CFR 51.1117. For San Joaquin Valley, a section 185 SIP revision for the 2008 ozone standards will be due on July 20, 2022.

IV. Other Commitments To Reduce Emissions

The 2016 Ozone Plan relies on control measures, such as state and district rules and regulations, that have been adopted and are being implemented to demonstrate attainment of the 2008 ozone NAAQS by 2031. However, in the 2016 Ozone Plan, the District also notes that newer NAAQS, e.g., the ozone NAAQS established in 2015, would require the development and submission of new plans with additional emissions reductions. In anticipation of these future requirements, the District included in the 2016 Ozone Plan commitments to amend two existing measures for flares and wine fermentation and storage tanks.145 As summarized in table 6, the District committed to implement emission reduction technologies to the extent those controls are technologically achievable and economically feasible; therefore, any emissions reductions resulting from these evaluations, to the extent those evaluations have not yet been completed, are uncertain. Because of this uncertainty, and because these amended measures are not required to meet RACM or other plan requirements, the District did not project emissions reductions or implementation dates for these amended measures.

145See Chapter 5, sections 5.2.1 and 5.2.2 of the 2016 Ozone Plan.

Table 6—District Committal Measures in 2016 Ozone PlanRuleRule titleDistrict commitmentSchedule4311Flares1. Amend Rule 4311 to include additional ultra-low NOX flare emissions limitations for existing and new flaring activities to the extent that such controls are technologically achievable and economically feasibleBy December 31, 2017.2. Amend Rule 4311 to include additional flare minimization requirements to the extent such controls are technologically achievable and economically feasible4694Wine Fermentation and Storage Tanks1. Evaluate the technological achievability and economic feasibility of implementing emissions control technologies to reduce VOC emissions and potential benefits to help reduce ozone concentrationsBy December 31, 2018.2. Upon completion of (1), amend Rule 4694 to include additional requirements to further reduce emissions from wine fermentation as appropriateSource: Table 5-3 and sections 5.2.1 and 5.2.2 of the 2016 Ozone Plan.

The District has committed to amend Rule 4311 for flares and Rule 4694 for wine fermentation and storage tanks to include additional requirements to reduce emissions to the extent those controls are technologically achievable or economically feasible; however, these commitments were made in the context of attainment of future ozone and PM2.5 standards. Although these commitments are not needed to meet any requirements for the 2008 ozone standards, the EPA is proposing to approve the commitments described in table 6 above, to further strengthen the San Joaquin Valley's portion of the California SIP.

The 2016 Ozone Plan references additional reductions anticipated from CARB's mobile source state strategy, a draft of which was released in October 2015.146 The State Strategy was adopted by CARB in 2017, and in its resolution adopting the 2016 State Strategy, CARB adopted a commitment to bring to the Board for consideration a list of regulatory measures included as Attachment A to the resolution of adoption (i.e., Resolution 17-7), according to the schedule set forth in Attachment A, and a commitment to achieve an aggregate emission reduction of 8 tpd of NOX in the San Joaquin Valley by 2031 to accelerate progress toward the 2008 ozone standards.147 The 2016 State Strategy anticipates reducing emissions to meet the aggregate commitment through such measures as new California low-NOX standards for on-road heavy-duty engines and more stringent diesel fuel requirements for off-road equipment.148

146See 2016 Ozone Plan, Chapter 5, section 5.4.2.

147See page 7, CARB Resolution 17-7, March 23, 2017.

148See table 5 (on page 34) of the 2016 State Strategy.

As noted above, the attainment demonstration in the 2016 Ozone Plan relies on adopted measures, rather than committal measures. Thus, CARB's regulatory initiative commitment and aggregate emission reduction commitment for San Joaquin Valley are not needed as part of the control strategy for the 2008 ozone NAAQS in San Joaquin Valley. However, the commitments by CARB for San Joaquin Valley in the 2016 State Strategy will strengthen the SIP by providing emissions reductions that supplement the reductions from the adopted controls; therefore, we are proposing to approve the San Joaquin Valley portions of the 2016 State Strategy into the SIP.

V. Proposed Action

For the reasons discussed above, under CAA section 110(k)(3), the EPA is proposing to approve as a revision to the California SIP the following portions of the San Joaquin Valley 2016 Ozone Plan 149 submitted by CARB on August 24, 2016:

149 As noted previously, the EPA has already approved the portions of the 2016 Ozone Plan (section 3.4 (“Reasonably Available Control Technology (RACT) Demonstration”) and Appendix C (“Stationary and Area Source Control Strategy Evaluations”)) that relate to the RACT requirements under CAA section 182(b)(2) and 40 CFR 51.1112.

• Motor vehicle emissions budgets for the attainment year of 2031 (see table 5, above) because they are consistent with the attainment demonstration proposed for approval herein and meet the other criteria in 40 CFR 93.118(e).

In addition, we are proposing to approve District Rule 1160 titled “Emission Statements” submitted by CARB on January 11, 1993, as a revision to the California SIP because it meets all the applicable requirements for emission statements and to approve the Emission Statement section of the 2016 Ozone Plan as meeting the requirements of CAA section 182(a)(3)(B) and 40 CFR 51.1102.

Finally, we are proposing to approve, as additional measures that strengthen the SIP, the San Joaquin Valley portions of the 2016 State Strategy and CARB's aggregate emission reduction commitment of 8 tpd of NOX by 2031 submitted on April 27, 2017, as a revision to the California SIP and the two commitments by the District in the 2016 Ozone Plan to amend Rules 4311 (Flares) and 4694 (Wine Fermentation and Storage).

We are not taking action at this time on the base year emissions inventory, the RFP demonstration, the motor vehicle emissions budgets for RFP milestone years, and contingency measures portions of the 2016 Ozone Plan. We intend to propose action on these elements at a later time.

The EPA is soliciting public comments on the issues discussed in this document. We will accept comments from the public on this proposal for the next 30 days and will consider comments before taking final action.

VI. Incorporation by Reference

In this action, the EPA is proposing to include in a final EPA rule regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is proposing to incorporate by reference District Rule 1160 as described in section III.B of this preamble. The EPA has made, and will continue to make, these materials available through www.regulations.gov and at the EPA Region IX Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information).

VII. Statutory and Executive Order Reviews

Under the Clean Air Act, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. Accordingly, this proposed action merely proposes to approve state plans and an air district rule as meeting federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this proposed action:

• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);

• Is not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because SIP approvals are exempted under Executive Order 12866;

• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);

• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.);

• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);

• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• Is not subject to requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act; and

• Does not provide the EPA with the discretionary authority to address disproportionate human health or environmental effects with practical, appropriate, and legally permissible methods under Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the proposed rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

ACTION:

Proposed rule, request for comments.

SUMMARY:

NMFS proposes regulations to implement measures in Amendment 20 to the Atlantic Mackerel, Squid, and Butterfish Fishery Management Plan and corrections to existing regulations. This action is necessary to prevent the reactivation of latent effort in the longfin squid fishery, preserve economic opportunities for more recently active participants in the longfin squid fishery, avoid overharvest during Trimester II (May-August) of the longfin squid fishery, and reduce potential negative impacts on inshore spawning longfin squid aggregations and squid egg masses. The Mid-Atlantic Fishery Management Council intends that these proposed measures would promote the sustainable utilization and conservation of the squid and butterfish resources, while promoting the sustained participation of fishing communities and minimizing adverse economic impacts on such communities.

DATES:

Public comments must be received by October 1, 2018.

ADDRESSES:

You may submit comments on this document, identified by NOAA-NMFS-2017-0110, by either of the following methods:

Instructions: Comments sent by any other method, to any other address or individual, or received after the end of the comment period, may not be considered by NMFS. All comments received are part of the public record and will generally be posted for public viewing on www.regulations.gov without change. All personal identifying information (e.g., name, address, etc.), confidential business information, or otherwise sensitive information submitted voluntarily by the sender will be publicly accessible. NMFS will accept anonymous comments (enter “N/A” in the required fields if you wish to remain anonymous).

A draft environmental assessment (EA) has been prepared for this action that describes the proposed measures and other considered alternatives and the potential impacts of such measures and alternatives. Copies of the specifications document, including the EA and the Initial Regulatory Flexibility Analysis, are available on request from Dr. Christopher M. Moore, Executive Director, Mid-Atlantic Fishery Management Council, 800 North State Street, Suite 201, Dover, DE 19901, telephone (302) 674-2331. The EA/Regulatory Impact Review (RIR)/Regulatory Flexibility Act (RFA) analysis is also accessible via the internet at http://www.mafmc.org/s/Squid-Amendment-Draft-EA.pdf.

Written comments regarding the burden-hour estimates or other aspects of the collection-of-information requirements contained in this proposed rule may be submitted to the Greater Atlantic Regional Fisheries Office and by email to OIRA_Submission@omb.eop.gov or fax to (202) 395-5806.

In 1995, the Mid-Atlantic Fishery Management Council (Council) adopted and NMFS approved a limited access permit system for longfin squid and butterfish as part of Amendment 5 to the Atlantic Mackerel, Squid, and Butterfish Fishery Management Plan (FMP) (April 2, 1996; 61 FR 14465). Under Amendment 5, NMFS issued longfin squid/butterfish moratorium permits to vessels that landed a minimum amount of either species during a specified qualification period. Since then, the number of vessels landing longfin squid has decreased, with a relatively small portion of vessels issued longfin squid/butterfish moratorium permits landing the majority of longfin squid in recent years. The Council is concerned that unused longfin squid/butterfish moratorium permits could be activated, which could lead to excessive fishing effort and bycatch of both longfin squid and non-target species. This could cause negative biological impacts to these species. In addition, this increased effort could increase the race to fish and reduce access to available longfin squid quota by vessels with a continuous history of landings in recent years. Therefore, the Council developed Amendment 20 to consider adjusting the number of vessels qualified to fish in the directed and incidental longfin squid fishery and design appropriate measures to prevent unanticipated increases in fishing effort. The proposed measures described below could help prevent a race to fish, frequent and disruptive fishery closures, and reduced fishing opportunities for vessels that are more recently dependent upon longfin squid.

Longfin squid spawning occurs year round but is most frequently observed inshore during the late spring through early fall. Spawning aggregations and associated egg masses (mops) that are attached to the bottom are vulnerable to bottom fishing activities during the summer months when longfin squid are easily accessible to the fishery in large concentrations. In 2007, the Council implemented reduced quotas during summer months (May through August, or Trimester II) as part of the trimester quota system (January 30, 2007; 71 FR 4211). The Council developed the trimester quota system to improve the monitoring and management of the longfin squid fishery and prevent allowable quotas from being exceeded. Once a trimester quota has been landed, possession limits are reduced to incidental levels for all longfin squid permits. The FMP currently includes a 2,500 lb (1,134 kg) possession limit per trip for incidental permits and for all longfin squid permits when the directed fishery has closed once a quota has been landed. However, this incidental limit has allowed vessels to continue to land large amounts of longfin squid even after the directed fishery is closed, and has contributed to the Trimester II quota being exceeded by large amounts in several years. The Council is concerned that excessive fishing effort inshore during Trimester II could negatively impact the stock, interrupting spawning activity, increasing the mortality of squid eggs, and reducing future recruitment. Measures developed by the Council under this action are intended to adjust the management of longfin squid during Trimester II primarily to reduce impacts to spawning squid and egg mops.

From March through May 2015, the Council held scoping meetings from Rhode Island through New Jersey to discuss these issues and develop responsive measures. After further development and analysis, the Council conducted public hearings in April and May 2017 to solicit input on the range of alternatives under consideration by the Council. The Council accepted public comments through May 18, 2017. On June 7, 2017, the Council adopted final measures as part of Amendment 20 to the Atlantic Mackerel, Squid, and Butterfish FMP. On March 21, 2018, the Council submitted the amendment and draft EA to NMFS for preliminary review, with submission of the final draft amendment on June 6, 2018. NMFS drafted the proposed regulations to implement these measures for Council review. The Council deemed the proposed regulations to be necessary and appropriate to implement Amendment 20 on April 27, 2018, as specified in section 303(c) of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act).

The purpose of Amendment 20 is to reduce latent (unused) effort in the longfin squid fishery and adjust the management of the longfin squid fishery during Trimester II (May through August). These measures are intended to avoid overharvesting the longfin squid resource and harming squid egg masses. Although the Council considered reducing the number of Illex squid moratorium permits in the fishery, the Council decided a reduction in the number of Illex moratorium permits was not appropriate at this time given low Illex landings and limited vessel participation in the fishery in most years. Measures proposed under this action would promote the sustainable utilization and conservation of the longfin squid and butterfish resources, while promoting the sustained participation of fishing communities and minimizing adverse economic impacts on such communities.

Proposed Measures

Under the Magnuson-Stevens Act, we are required to publish proposed rules for comment after preliminarily determining whether they are consistent with applicable law. The Magnuson-Stevens Act allows us to approve, partially approve, or disapprove measures that the Council proposes based only on whether the measures are consistent with the fishery management plan, plan amendment, the Magnuson-Stevens Act and its National Standards, and other applicable law. Otherwise, we must defer to the Council's policy choices. We are seeking comments on the Council's proposed measures in Amendment 20 described below and whether they are consistent with the Atlantic Mackerel, Squid, and Butterfish FMP, the Magnuson-Stevens Act and its National Standards, and other applicable law.

This proposed rule includes changes to existing FMP measures adopted by the Council under Amendment 20, but also several revisions to regulations that are not specifically identified in Amendment 20. These revisions are necessary to effectively implement the provisions in Amendment 20, or to correct errors in, or clarify, existing provisions. NMFS is proposing these latter changes under the authority of section 305(d) of the Magnuson-Stevens Act.

1. Separate Butterfish Moratorium Permit

Amendment 5 created a joint longfin squid/butterfish moratorium permit based on the historic overlap between the directed longfin squid and butterfish fisheries. NMFS issued moratorium permits to qualified vessels based on a minimum landings amount of either species during the qualification period. To reduce capacity in the longfin squid fishery without unintentionally reducing domestic fishing capacity for butterfish, Amendment 20 proposes to separate the longfin squid/butterfish moratorium permit into two moratorium permits, one for each species. Amendment 20 would create a new butterfish moratorium permit and a separate, revised longfin squid moratorium permit, as described further below.

Under Amendment 20, all entities currently issued a longfin squid/butterfish moratorium permit would be automatically issued a new and separate butterfish moratorium permit. The existing permit restrictions and vessel trip report (VTR), observer, slippage, and transfers at sea requirements currently applicable to the existing longfin squid/butterfish moratorium permit would apply to the proposed new butterfish moratorium permit. These permits would maintain the existing vessel permit baseline characteristics, vessel replacement and upgrade provisions, and the restriction on permit splitting; be required to submit vessel trip reports on a weekly basis; and be subject to measures to address slippage and transfers at sea specified at 50 CFR 648.11(n)(3) and 648.13, respectively. Vessels issued a new butterfish moratorium permit would not be required to submit a specific butterfish trip declaration using the vessel monitoring system (VMS) or submit daily VMS catch reports of butterfish but would be required to maintain an operational VMS unit to provide NMFS with automatic position reports. Finally, the existing butterfish possession limits specified at § 648.26(d)(1) and (2) (unlimited when fishing with a mesh size of three inches (76 mm) or greater, and 5,000 lb (2,268 kg) per trip when fishing with less than three-inch (76-mm) mesh) would remain the same for this new permit.

2. Tier 1 Longfin Squid Moratorium Permit

Amendment 20 proposes to re-qualify current longfin squid moratorium permits based on recent landings history to reduce the potential for the reactivation of latent fishing permits. Under this measure, NMFS would issue a new Tier 1 longfin squid moratorium permit only to 2018 longfin squid/butterfish moratorium permits that landed at least 10,000 lb (4,536 kg) of longfin squid in any year from 1997-2013. The Regional Administrator would use fishing history, as documented through dealer reports, to re-qualify permits, including permits currently held in confirmation of permit history (CPH), and automatically issue Tier 1 longfin squid moratorium permits to qualified entities.

Any vessel owner could apply for a Tier 1 longfin squid permit within one year of the effectiveness of this permit, if approved under Amendment 20. A vessel owner that does not qualify to be issued a new Tier 1 longfin squid moratorium permit would be notified by the Regional Administrator and could appeal that decision within 30 days of the denial notice. An appeal would require a written request to the Regional Admininstrator, and the appeal would be reviewed by the NOAA Fisheries National Appeals Office. Appeals could be based upon evidence that the information used in the original denial was incorrect. During an appeal, a vessel owner could request the Regional Administrator to authorize its vessel to continue fishing for longfin squid under the measures for a Tier 1 permit until that appeal is completed.

A vessel issued a Tier 1 longfin squid moratorium permit would be subject to all measures applicable to the existing longfin squid/butterfish moratorium permit, including, but not limited to, the vessel baseline and upgrade, VTR and VMS reporting, observer, slippage, and transfers at sea requirements. A Tier 1 longfin squid moratorium permit would be able to land an unlimited amount of longfin squid per trip, unless the directed longfin squid fishery is closed and incidental limits are implemented, as described further below. As currently allowed for longfin squid/butterfish moratorium permits, Tier 1 permits could also possess up to 15,000 lb (6,804 kg) of longfin squid per trip after the longfin squid fishery is closed in Trimester II, provided the vessel is declared into the Illex squid fishery, possesses at least 10,000 lb (4,536 kg) of Illex squid, and is fishing offshore.

3. Tier 2 Longfin Squid Moratorium Permit

Although the Council chose to reduce latent longfin squid permits, it also wanted to recognize the historic participation of permits that originally qualified for a longfin squid/butterfish moratorium permit. To do so, Amendment 20 would create a separate longfin squid moratorium permit with a moderate possession allowance. The Regional Administrator would automatically issue a Tier 2 longfin squid moratorium permit to any vessel currently issued a 2018 longfin squid/butterfish moratorium permit or an entity issued such a permit in CPH that does not qualify for a Tier 1 longfin squid moratorium permit described above. A Tier 2 permit would be subject to all measures applicable to the existing longfin squid/butterfish moratorium permit, including, but not limited to, the permit, VTR and VMS reporting, observer, slippage, and transfers at sea requirements. However, a Tier 2 permit would only be allowed to land up to 5,000 lb (2,268 kg) of longfin squid per trip, unless the directed longfin squid fishery is closed and incidental limits are implemented, as described further below. Similar to Tier 1 permits, a vessel issued a longfin squid Tier 2 moratorium permit could continue to possess up to 5,000 lb (6,804 kg) of longfin squid per trip after the longfin squid fishery is closed in Trimester II. To do so, a Tier 2 moratorium permitwould have to declare into the Illex squid fishery, possess at least 10,000 lb (4,536 kg) of Illex squid, and fish offshore in the area specified at § 548.23(a)(5).

4. Tier 3 Longfin Squid Incidental Permit

Under Amendment 20, the Council wanted to reduce incentives to target longfin squid under an incidental permit, while still preserving more recent fishing patterns and minimizing discards of squid caught while targeting other species. Under this measure, NMFS would issue a new Tier 3 longfin squid moratorium permit to vessels previously issued an open access squid/butterfish incidental catch permit in any year that landed more than 5,000 lb (2,268 kg) of longfin squid in at least one calendar year from 1997-2013 based on dealer landings data. By limiting access to this incidental permit such that it could not be dropped and re-issued at any time, this measure would prevent a vessel owner from canceling his/her Federal permit to fish for longfin squid in state waters above Federal limits during the fishing year. This would better control longfin squid landings, particularly after a closure of the fishery in Trimester II.

A vessel owner must apply for a Tier 3 longfin squid moratorium permit by submitting an application to the Regional Administrator within one year of the effectiveness of these permits, if approved under Amendment 20. The owner of a vessel permit that does not qualify for a new Tier 3 longfin squid moratorium permit would be notified by the Regional Administrator and could appeal that decision within 30 days of the denial notice. An appeal would require a written request to the Regional Admininstrator, and the appeal would be reviewed by the NOAA Fisheries National Appeals Office. Appeals could be based upon evidence that the information used in the original denial was incorrect. During an appeal, a vessel owner could request the Regional Administrator to authorize its vessel to continue fishing for longfin squid under the measures for a Tier 3 longfin squid permit until that appeal is completed.

A vessel issued a Tier 3 longfin squid permit would be subject to all measures applicable to the existing squid/butterfish incidental catch permit. Unlike Tier 1 or 2 longfin squid moratorium permits, Tier 3 permits would not be issued a vessel baseline, and would not be subject to the vessel upgrade provisions. A Tier 3 longfin squid moratorium permit would be able to land up to 2,500 lb (1,134 kg) of longfin squid per trip, unless the directed longfin squid fishery is closed during Trimester II and incidental limits are implemented, as described further below.

5. Longfin Squid Moratorium Permit Swap

Amendment 20 would allow an owner of more than one longfin squid/butterfish moratorium permit as of May 26, 2017, a one-time opportunity to move longfin squid moratorium permits onto a different vessel that they own to optimize their fishing operations. Under this measure, a vessel owner could move a qualified Tier 1 longfin squid moratorium permit from one of his/her vessels and place it on another vessel that is owned by that same entity and also issued a Tier 2 longfin squid moratorium permit. In this exchange, the Tier 2 longfin squid moratorium permit would be moved onto the vessel originally issued the Tier 1 longfin squid moratorium permit. This allows a vessel owner to “swap” Tier 1 and Tier 2 longfin squid moratorium permits among vessels owned by that entity such that the Tier 1 longfin squid moratorium permit is placed on a vessel that is better able to capitalize on the longfin squid fishing opportunities available to such a permit than the other vessel. This measure is intended to help maximize potential fishing opportunities and associated revenue for entities that have been issued multiple longfin squid moratorium permits on separate vessels and mitigate the loss of revenue potential associated with a permit that does not re-qualify for a Tier 1 longfin squid moratorium permit.

Only permits issued to vessels owned by the same business entity as of May 26, 2017, would be able to participate in the permit swap; a permit held in CPH as of May 26, 2017, would not be eligible to participate. May 26, 2017, is the day that June 2017 Council meeting materials, including the description of proposed measures, were made available to the public. The Council chose this date to limit eligibility for permit swaps to reduce the potential that business entities would change permit ownership to take advantage of this measure and circumvent the purpose of this measure.

Vessels involved in the swap would also need to be within 10 percent of the baseline length overall and 20 percent of the baseline horsepower of the permit to be placed on that vessel. Only Tier 1 and Tier 2 longfin squid moratorium permits could be transferred as part of this permit swap; no other fishery permits could be swapped as part of this transaction. An owner interested in swapping permits would need to apply for the permit swap within one year of the issuance of the Tier 1 or Tier 2 longfin squid moratorium permits. If approved, the Regional Administrator would distribute a permit swap application form to permit holders.

6. Incidental Longfin Squid Possession Limit

Amendment 20 would reduce the longfin squid possession limit from 2,500 lb (1,134 kg) per trip to 250 lb (113 kg) per trip for vessels issued an open access squid/butterfish incidental permit. A lower incidental possession limit would reduce incentives to target longfin squid and more effectively control fishing effort and landings in the fishery. This could reduce overall fishing effort and bycatch and associated mortality on longfin squid and other species.

This action would also reduce the longfin squid incidental limit for all longfin squid permits from 2,500 lb (1,134 kg) per trip to 250 lb (113 kg) per trip once the Trimester II quota has been landed. The longfin squid incidental limit would remain 2,500 lb (1,134 kg) per trip for any closure implemented during Trimesters I or III. In recent years, excessive landings under the current incidental trip limit (2,500 lb (1,134 kg)) following the closure of the directed fishery in Trimester II has resulted in substantial overages of the Trimester II quota. This measure would reduce incentives to target longfin squid after such a closure, reducing bycatch of longfin squid and other species and impacts to spawning squid and egg mops during Trimester II.

7. Corrections and Clarifications to Existing Regulations

In § 648.2, the term “Northeast Regional Office” in the definition of “Atlantic Mackerel, Squid, and Butterfish Monitoring Committee” would be revised to “Greater Atlantic Regional Fisheries Office” to accurately reflect the current name of the facility. Definitions for “Calendar day,” “Directed fishery,” and “Incidental catch” would be added to clarify the application of these terms in the Atlantic Mackerel, Squid, and Butterfish FMP regulations, and to eliminate repeated definition of these terms in the regulations.

In § 648.4(a)(5)(iii), paragraph (B) would be revised to reflect the mackerel landing limit in kg instead of mt, and paragraphs (C), (D), (E), (H) would be revised and paragraph (M) would be deleted to eliminate outdated and unnecessary permit eligibility, application, qualification, baseline, and appeal regulations, respectively, related to the 2011 qualification of limited access mackerel permits.

In § 648.7, text at (a)(1)(i) and (ii) that was inadvertently deleted in the final rule implementing the Mid-Atlantic Unmanaged Forage Omnibus Amendment (August 28, 2017; 82 FR 40721) would be reinserted.

In § 648.10(e)(5)(i), the phrase “. . . or monkfish fishery” would be replaced with “monkfish, or any other fishery” to maintain consistency with other language in this paragraph and related text in paragraph (e)(5)(ii). This revision is necessary to ensure that a vessel that is subject to VMS requirements in any fishery accurately declares its intended fishing operations before leaving port.

In § 648.13, paragraph (a) would be revised to clarify that longfin squid, Illex squid, and butterfish moratorium permits and squid/butterfish incidental catch permits must be issued a letter of authorization (LOA) by the Regional Administrator to transfer longfin squid, butterfish, or Illex squid at sea. This would make the regulations consistent with the LOA language and historic practice.

In § 648.14, five corrections are proposed, as follows:

1. The introductory text to paragraph (g)(1)(i) would be revised to insert reference to the fishery closure and accountability measure regulations at § 648.24(d) and to replace “Take, retain . . .” with “Take and retain . . .” The first correction is to ensure that this prohibition can be effectively administered and enforced and accurately reflects notifications associated with the implementation of specifications, closures, and accountability measures. The second correction restores the original language of this prohibition to accurately reflect its intent to allow vessels that may encounter these species during normal operations to interact with and discard these species, as appropriate.

2. Paragraph (g)(1)(ii)(B) would be revised to use the term “Illex squid” consistent with the use of this term in other regulations and reflect the corrections to § 648.13(a) described above.

3. Paragraph (g)(2)(i) would be revised to reference Subpart B instead of § 648.22 to ensure that the general prohibition applies to all Atlantic Mackerel, Squid, and Butterfish FMP measures, not just those implemented via the specifications process because FMP measures are implemented via framework adjustments, amendments, and specifications actions.

4. Paragraphs (g)(2)(ii)(D) and (F) would be revised to read that it is unlawful for any person owning or operating a vessel issued a valid mackerel, squid, and butterfish fishery permit, or issued an operator's permit to “Take and retain, possess, or land” these species instead of “Take, retain, possess, or land” these species. This distinction is necessary to allow vessels that may encounter these species during normal operations to interact with and discard these species, as appropriate, consistent with Council intent.

5. Paragraph (g)(2)(v) would be revised to replace “limited access” with “directed” to reference the Atlantic mackerel, longfin squid, and Illex squid fisheries. This is intentended to maintain consistency with the way in which these fisheries are referenced in other applicable regulations.

In § 648.22, several corrections are proposed. In paragraph (a), species headings would be added to clarify which elements are to be specified for each species during the specifications process and to spell out terms used for the first time in the regulations. The term “Illex squid” would replace the term “Illex” for clarity in several paragraphs. Finally, in paragraph (c)(3), the reference to § 648.4(1)(5)(ii) would be replaced with reference to § 648.4(a)(5)(vi) to accurately reflect the correct regulation for the squid/butterfish incidental catch permit.

In § 648.25(a)(4)(i), the reference to paragraph (a)(2) would be replaced with the accurate reference to paragraph (a)(3) of that section.

Classification

Pursuant to section 304(b)(1)(A) of the Magnuson-Stevens Act, the NMFS Assistant Administrator has determined that this proposed rule is consistent with Amendment 20 to the Atlantic Mackerel, Squid, and Butterfish FMP, other provisions of the Magnuson-Stevens Act, and other applicable law, subject to further consideration after public comment.

This proposed rule has been determined to be not significant for the purposes of Executive Order 12866.

This proposed rule does not contain policies with Federalism or takings implications as those terms are defined in E.O. 13132 and E.O. 12630, respectively.

The Council prepared a draft EA for this action that analyzes the impact of measures contained in this proposed rule. The EA includes an IRFA, as required by section 603 of the RFA, which is supplemented by information contained in the preamble of this proposed rule. The IRFA, as summarized below, describes the economic impact this proposed rule, if adopted, would have on small entities. A description of the action, why it is being considered, and the legal basis for this action are contained in the preamble to this proposed rule. A copy of the RFA analysis is available from the Mid-Atlantic Council (see ADDRESSES).

Description of the Reasons Why Action by the Agency Is Being Considered

The purpose of this action is to optimize management measures in the squid fisheries by reducing latent (unused) effort in the longfin squid fishery and adjusting the management of the longfin squid fishery during Trimester II (May through August) to avoid overharvesting the longfin squid resource. Section 4.0 of the EA prepared for this action (see ADDRESSES) contains a more thorough description of the purpose and need for this action.

Statement of the Objectives of, and Legal Basis for, This Proposed Rule

The legal basis and objectives for this action are contained in the preamble to this proposed rule, and are not repeated here. Sections 4.0 and 5.0 of the EA prepared for this action (see ADDRESSES) contains a more thorough description of the purpose and need for this action and the rational for each measure considered.

Description and Estimate of the Number of Small Entities to Which This Proposed Rule Would Apply

For the purposes of the RFA analysis, the ownership entities (or firms), not the individual vessels, are considered to be the regulated entities. Ownership entities are defined as those entities or firms with common ownership personnel as listed on the permit application. Because of this, some vessels with Federal longfin squid/butterfish permits may be considered to be part of the same firm because they may have the same owners. The North American Industry Classification System (NAICS) is the standard used by Federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy. For purposes of the RFA, a business primarily engaged in commercial fishing activity is classified as a small business if it has combined annual gross receipts not in excess of $11 million (NAICS 11411) for all its affiliated operations worldwide. A business primarily engaged in for-hire (charter/party) operations is characterized as annual gross receipts not in excess of $7.5 million. To identify these small and large firms, vessel ownership data from the permit database were grouped according to common owners and sorted by size. The current ownership data set used for this analysis is based on calendar year 2016 (the most recent complete year available).

The proposed action would affect any vessel issued a valid Federal longfin squid/butterfish moratorium permit or an open access squid/butterfish incidental permit. According to the commercial database, 295 separate vessels were issued a longfin squid/butterfish moratorium permit in 2016. These vessels were owned by 222 entities, of which 214 were categorized as small business entities using the definition specified above. In 2016, 1,528 vessels were issued an open access squid/butterfish incidental permit. These vessels were owned by 1,114 entities, of which 1,105 were small business entities. In total, 1,319 small business entities may be affected by this rule out of a potential 1,336 entities (large and small) that may be affected by this action. Therefore, 99 percent of affected entities are categorized as small businesses.

Not all entities potentially affected by this action landed fish for commercial sale in 2016. Nine small business entities issued a longfin squid/butterfish moratorium permit did not have any fishing revenue in 2016, while 274 small business entities issued an open access squid/butterfish incidental catch permit did not have any fishing revenue in 2016. Only 1,036 small business entities had fishing revenue in 2016, representing 79 percent of the small entities potentially affected by this action.

Description of the Projected Reporting, Recordkeeping, and Other Compliance Requirements of This Proposed Rule

This proposed rule contains collection-of-information requirements subject to review and approval by the Office of Management and Budget (OMB) under the Paperwork Reduction Act (PRA). This requirement has been submitted to OMB for approval. Public reporting burden and costs associated with these information collections, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information, are estimated to average, as follows:

1. Application for a longfin squid moratorium permit, OMB #0648-0679 (60 min/response and an annual cost of $254.80 for postage);

2. Appeal of the denial of a longfin squid moratorium permit, OMB #0648-0679 (120 min/response and an annual cost of $226.87 for postage); and

Public comment is sought regarding: Whether this proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; the accuracy of the burden estimate; ways to enhance the quality, utility, and clarity of the information to be collected; and ways to minimize the burden of the collection of information, including through the use of automated collection techniques or other forms of information technology. Send comments on these or any other aspects of the collection of information to the Greater Atlantic Regional Fisheries Office at the ADDRESSES above, and email to OIRA_Submission@omb.eop.gov, or fax to (202) 395-5806.

Federal Rules Which May Duplicate, Overlap, or Conflict With This Proposed Rule

This proposed rule does not duplicate, overlap, or conflict with any other Federal rule.

Description of Significant Alternatives to the Proposed Action Which Accomplish the Stated Objectives of Applicable Statutes and Which Minimize Any Significant Economic Impact on Small Entities

Section 7.5 of the EA estimates the number of vessel permits that would qualify under each alternative and the associated economic impacts to affected entities based on recent landings, with additional analysis provided in Section 12 of the EA. The text below summarizes the economic impacts for significant non-selected alternatives.

1. Longfin Squid Moratorium Permit Qualification

Under Amendment 20, the Council considered five alternatives, including the no-action alternative, to reduce latent permits in the longfin squid fishery through the creation of a tiered permit system based on historical participation in the fishery. The alternatives included different combinations of qualifying years (1997-2013 or 1997-2015) and minimum landings thresholds (10,000 lb (4,536 kg), 25,000 lb (11,340 kg), or 50,000 lb (22,680 kg)). Of these five alternatives, only Alternative 1B is considered a significant alternative because it meets the objectives of this action and minimizes adverse economic impacts compared to the proposed action (Alternative 1C); the no action alternative (Alternative 1A) would not meet the objectives of this action.

Unlike the proposed action which is based on landings through 2013, Alternative 1B would re-qualify a vessel for a longfin squid moratorium permit if it landed more than 10,000 lb (4,536 kg) of longfin squid in any year during 1997-2015. Based on these criteria, 224 vessel permits currently issued a longfin squid/butterfish moratorium permit would qualify for and be issued a Tier 1 longfin squid moratorium permit under Amendment 20. The 159 vessels that would not qualify would be issued a Tier 2 longfin squid moratorium permit and be restricted to 5,000 lb (2,268 kg) of longfin squid per trip. From 2014-2016, 80 percent of these vessels (127) did not land any longfin squid. Of the 32 vessels that landed some longfin squid during 2014 and 2016, 6 vessels took 32 trips that landed more than 5,000 lb (2,268 kg) of longfin squid, all during 2016. If such trips would have been limited to 5,000 lb (2,268 kg) of longfin squid, foregone revenues would have totaled $438,835, or $73,139 annually per vessel. This amount represents 7 percent of their total average annual fishing revenues of $1,042,770 during 2014-2016. Given the increased availability of longfin squid during 2016, this is likely an upper bound estimate of the likely impacts to affected vessels, as availability fluctuates yearly and these vessels did not land more than 5,000 lb (2,268 kg) of longfin squid from any trip during 2014 or 2015.

Alternative 1B was not selected by the Council for several reasons. The year range used to requalify permits under this alternative (1997-2015) is not consistent with the May 16, 2013, control date specified by the Council for this action. This control date served as public notice that the Council intended to further reduce capacity in the longfin squid fishery and that any fishing activity after this date may not qualify for future access to this fishery. The preferred alternative incorporates the control date and would only re-qualify permits based on landings through 2013. Alternative 1B would also re-qualify ten more longfin squid moratorium permits than the preferred alternative. These additional permits have not been regular participants in the squid fishery. Considering the sum of their individual best years from 1994-2016, these vessels have the capacity to land an additional 500,000 lb (227 mt) of longfin squid compared to vesssels qualifying under the preferred alternative based on the highest landings of qualifying vessels under each alternative. This additional fishing capacity has the potential to exacerbate seasonal closures implemented in the longfin squid fishery in 2014 and 2016, and could lead to a race to fish; excess longfin squid catch and landings, particularly during the spawning season; and reduced fishing opportunities for permits that have been more dependent on longfin squid based on past operations. As noted above, the Council attempted to mitigate economic impacts by creating a Tier 2 longfin squid moratorium permit that allows for moderate possession limits to vessels that do not re-qualify. Therefore, the Council concluded that the preferred alternative represented the best balance of avoiding excessive landings and a race to fish by not allowing too many vessels to target longfin squid, while ensuring that enough vessels remain in the fishery to achieve optimum yield and minimizing economic impacts to vessels that do not re-qualify.

Under Amendment 20, the Council considered three alternatives to reduce incidental catch permits in the longfin squid fishery, including the no-action alternative. Of these three alternatives, only Alternative 3B is considered a significant alternative because it meets the objectives of this action and minimizes adverse economic impacts compared to the preferred alternative (Alternative 3C); the no action alternative (Alternative 3A) would not meet the objectives of this action. Both Alternatives 3B and 3C used the same qualifying years (1997-2013), but different minimum landings thresholds (2,500 lb (1,134 kg) for Alternative 3B and 5,000 lb (2,268 kg) for Alternative 3C). Under each alternative, the Council considered two options for incidental longfin squid possession limits—250 lb (113 kg) or 500 lb (227 kg) per trip.

Under Alternative 3B, 385 vessels would qualify and be issued a Tier 3 longfin squid moratorium permit, allowing such vessels to continue landing up to 2,500 lb (1,134 kg) of longfin squid per trip. Out of the 1,143 vessels that would not qualify for a Tier 3 permit under Alternative 3B, 755 (66 percent) did not have any longfin squid landings during the qualifying period, while 388 (34 percent) landed less than 2,500 lb (1,134 kg) of longfin squid during the qualification period. Of these 388 permits with minimal longfin squid landings, 32 permits took 101 trips during 2014-2016 that landed 250-2,500 lb (113-1,134 kg) of longfin squid, resulting in nearly $270,000 in longfin squid revenue that averaged $1,120 per year for each permit. Twenty-one of these vessels took 52 trips during 2014-2016 that landed between 500-2,500 lb (226-1,134 kg) of longfin squid, averaging $1,437 per permit per year. Under either trip limit option, each non-qualified vessel would lose, on average, $1,134-$1,437 per year under Alternative 3B. These vessels earned an average of $683,723 from the landings of all species during 2014-2016. Therefore, longfin squid landings from trips affected by Alternative 3B represented only a small fraction (less than one quarter of one percent) of total fishing revenue for these vessels.

The Council selected Alternative 3C over Alternative 3B because the preferred alternative would more effectively create a system where vessels with incidental permits that had substantial longfin squid landings would keep their current possession limit and not be forced to discard longfin squid. It would also limit vessels without a history of substantial landings to a smaller possession limit. The higher minimum landing threshold under Alternative 3C would only require vessels to have made two trips maximizing the current incidental catch limit to qualify compared to one trip under Alternative 3B. This very low qualification threshold minimizes the number of non-qualified vessels to those that were landing minimal amounts of longfin squid in the past, consistent with the Council's rationale for selecting a low, but not the lowest, landings threshold to retain the longfin squid moratorium permit described above. Input from the Council's Mackerel, Squid, and Butterfish Advisory Panel indicated that a low possession limit of 250-500 lb (226-452 kg) would strongly reduce incentives to target longfin squid. Consistent with the objectives of this action, the Council preferred the lowest possession limit for incidental permits to eliminate incentives to target longfin squid and to minimize discards of squid caught as bycatch in other fisheries.

Under Amendment 20, the Council considered three alternatives to reduce the longfin squid incidental possession limit for all longfin squid permits once the available Trimester II quota was landed, including the no-action alternative. The no action alternative (Alternative 5A) would allow all permitted longfin squid vessels to continue to possess up to 2,500 lb (1,134 kg) of longfin squid after the Trimester II quota is caught and the directed fishery is closed, while Alternative 5B (the Council's preferred alternative) and 5C would allow vessels to retain up to 250 lb (113 kg) or 500 lb (226 kg) per trip, respectively, after such a closure. Alternatives 5A and 5C are both considered significant alternatives because they meet the objectives of this action and minimize adverse economic impacts compared to the preferred alternative.

Longfin squid landings and revenue from 2016 provide a good indication of potential maximum economic impacts to vessels under Alternatives 5A, 5B, and 5C, as longfin squid landings continued after the Trimester II directed fishery was closed from June 29-August 31, 2016. Assuming squid are similarly available in the future, 2016 landings data indicate that Alternative 5A could allow the fishery to land up to 5.6 million lb (2,540 mt) of longfin squid under the current 2,500 lb (1,134 kg) incidental possession limit following the closure of the directed fishery in Trimester II. Nearly all of these landings were from trips that landed more than 250 lb (113 kg), although not all landings occurred in Federal waters. Using 2016 prices, these landings were valued at $6.4 million, and represent an upper bound estimate of potential revenue under Alternative 5A that potentially would be lost under this action. Trips landing between 250-2,500 lb (113-1,134 kg) of longfin squid after the closure accounted for 3.4 million lb (1,542 mt) of longfin squid landings valued at $4.1 million. Average vessel revenue for the 129 vessels that took these trips was $31,444, representing just 4.8 percent of their total average longfin squid landing revenue ($649,473) during 2016. This approximates potential revenue losses under Alternative 5B. For a majority of these vessels, longfin squid was not a substantial portion of total fishery revenue in 2016, with only 14 percent of affected vessels relying on longfin squid for more than 20 percent of total fishery revenue. Potential revenue lost under Alternative 5C is reflected by trips landing between 500-2,500 lb (226-1,134 kg), which accounted for 3.4 million lb (1,542 mt) of landings valued at $4.0 million during 2016. Average vessel revenue for the 123 vessels that took these trips was $32,303, representing 5.2 percent of their total average longfin squid landing revenue ($620,887) during 2016.

The Council preferred Alternative 5B because it would better achieve the objectives of this action. Alternative 5B would provide additional control over longfin squid catch following the closure of the directed fishery during Trimester II and reduce negative impacts to longfin squid and egg mops during the spawning season. Landings after the 2016 Trimester II closure accounted for 30 percent of overall landings during that period. Excessive landings during Trimester II could negatively affect squid productivity and have been shown to reduce longfin squid catch rates in subsequent seasons. Unlike the no action alternative (Alternative 5A) and Alternative 5C, the preferred alternative would help prevent excessive longfin catch by reducing incentives to target longfin squid under a very low incidental possession limit based on input from the Council's Advisory Panel. During 2016, only one percent of longfin squid landings after the Trimester II closure occurred on trips landing 250 lb (113 kg) or less, suggesting that the proposed action would essentially eliminate excessive catch and more effectively ensure that landings do not exceed allowable limits during Trimester II. Although Alternative 5B would result in the highest potential foregone revenues among alternatives considered, if longfin squid remain available into Trimester III or future longfin squid productivity increases due to reduced effort during the spawning season, the preferred alternative may produce higher future economic returns than other alternatives.

For the reasons set out in the preamble, 50 CFR part 648 is proposed to be amended as follows:

PART 648—FISHERIES OF THE NORTHEASTERN UNITED STATES1. The authority citation for part 648 continues to read as follows:Authority:

16 U.S.C. 1801 et seq.

2. In § 648.2, revise the definition of “Atlantic Mackerel, Squid, and Butterfish Monitoring Committee” and add definitions for “Calendar day,” “Directed fishery,” and “Incidental catch” in alphabetical order to read as follows:§ 648.2 Definitions.

Atlantic Mackerel, Squid, and Butterfish Monitoring Committee means the committee made up of staff representatives of the MAFMC and the NEFMC, and the Greater Atlantic Regional Fisheries Office and NEFSC of NMFS. The MAFMC Executive Director or a designee chairs the Committee.

Calendar day, with respect to the squid and butterfish fisheries, means the 24-hr period beginning at 0001 hours and ending at 2400 hours,

Directed fishery, with respect to the longfin squid, Illex squid, and butterfish fisheries, means commercial fishery operations in which more than an incidental catch of each species, as defined in this section, is retained by a vessel.

(5) Mackerel, squid, and butterfish vessels. Any vessel of the United States, including party and charter vessels, must have been issued and carry on board a valid vessel permit to fish for, possess, or land Atlantic mackerel, squid, or butterfish in or from the EEZ.

(i) Longfin squid moratorium permits.

(A) Eligibility. To be eligible to apply for a moratorium permit to fish for and retain longfin squid in excess of the incidental catch allowance in paragraph (a)(5)(vi) of this section in the EEZ, a vessel must have been issued a longfin squid moratorium permit for the preceding year, be replacing a vessel that was issued a moratorium permit for the preceding year, or be replacing a vessel that was issued a confirmation of permit history. Beginning in fishing year 2018, a vessel may be eligible for and could be issued a Tier 1, Tier 2, or Tier 3 longfin squid moratorium permit if the vessel and associated fishing history meet the criteria described under paragraphs (a)(5)(i)(A)(1) through (3) of this section.

(1) Tier 1 longfin squid moratorium permit. Beginning on [date 90 days after the date of publication of the final rule in theFederal Register], the Regional Administer shall automatically issue a Tier 1 longfin squid moratorium permit to any vessel that is issued a longfin squid/butterfish moratorium permit or eligible to be issued such a permit held in confirmation of permit history (CPH) during calendar year 2018 that meets the eligibility criteria in this paragraph (a)(5)(i)(A)(1). To be eligible for a Tier 1 permit, a vessel must have been issued a valid longfin squid/butterfish moratorium permit and landed more than 10,000 lb (4,536 kg) of longfin squid in at least one calendar year between January 1, 1997, and December 31, 2013. Fishing history, including for a permit held in confirmation of permit history, can be used by a vessel to qualify for and be issued a Tier 1 longfin squid moratorium permit, provided the Regional Administrator has determined that the fishing and permit history of such vessel has been lawfully retained by the applicant. Landings data used in this qualification must be verified by dealer reports submitted to NMFS. A vessel that was not automatically issued a Tier 1 longfin squid moratorium permit may apply for such a permit in accordance with paragraph (a)(5)(i)(B) of this section.

(2) Tier 2 longfin squid moratorium permit. Beginning on [date 90 days after the date of publication of the final rule in theFederal Register], the Regional Administer shall automatically issue a Tier 2 longfin squid moratorium permit to any vessel that is issued a longfin squid/butterfish moratorium permit or eligible to be issued such a permit held in CPH during fishing year 2018 that does not qualify for a Tier 1 longfin squid moratorium permit, as described in paragraph (a)(5)(i)(A)(1) of this section.

(3) Tier 3 longfin squid moratorium permit. To be issued a Tier 3 permit, a vessel must have been issued an open access squid/butterfish permit and landed more than 5,000 lb (2,268 kg) of longfin squid in at least one calendar year between January 1, 1997, and December 31, 2013. Landings data used in this qualification must be verified by dealer reports submitted to NMFS.

(B) Application/renewal restriction. See paragraph (a)(1)(i)(B) of this section. Unless automatically issued a Tier 1 or 2 longfin squid moratorium permit in accordance with paragraphs (a)(5)(i)(A)(1) or (2) of this section, beginning on [date 90 days after the date of publication of the final rule in theFederal Register], a vessel owner may submit an initial application for a longfin squid moratorium permit described in paragraph (a)(5)(i)(A)(1) through (3) of this section. The initial application must be received by NMFS or postmarked no later than [date 455 days after the date of publication of the final rule in theFederal Register]. An initial application for a longfin squid moratorium permit that is not postmarked before [date 455 days after the date of publication of the final rule in theFederal Register], will not be processed because of this regulatory restriction, and will be returned to the sender with a letter explaining the reason for its return.

(C) Qualification restriction. See paragraph (a)(1)(i)(C) of this section. Longfin squid landings history generated by separate owners of a single vessel at different times during the qualification period for a longfin squid moratorium permit may be used to qualify more than one vessel, provided that each owner applying for such a permit demonstrates that he/she created distinct fishing histories, that such histories have been retained, and if the vessel was sold, that each applicant's eligibility and fishing history is distinct.

(D) Change in ownership. See paragraph (a)(1)(i)(D) of this section.

(E) Replacement vessels. With the exception of a vessel issued a longfin squid Tier 3 moratorium permit, to be eligible for a longfin squid moratorium permit, a replacement vessel must meet the criteria specified in paragraph (a)(1)(i)(E) of this section.

(F) Upgraded vessel. With the exception of a vessel issued a longfin squid Tier 3 moratorium permit, the upgrade provisions in paragraph (a)(1)(i)(F) of this section apply to a vessel issued a longfin squid moratorium permit.

(G) Consolidation restriction. See paragraph (a)(1)(i)(G) of this section.

(H) Vessel baseline specifications. With the exception of a vessel issued a longfin squid Tier 3 moratorium permit, the vessel baseline specification measures specified in paragraph (a)(3)(i)(H) of this section apply to a vessel issued a longfin squid moratorium permit.

(I) One-time longfin squid moratorium permit swap. An entity that owns multiple vessels issued longfin squid/butterfish moratorium permits as of May 26, 2017, has a one-time opportunity to swap one Tier 1 longfin squid moratorium permit issued to one of its vessels with a longfin squid Tier 2 moratorium permit issued to another of its vessels. No other fishery permits issued under this section may be transferred pursuant to this paragraph (a)(5)(i)(I). To be eligible for the one-time longfin squid moratorium permit swap, the following conditions must be met:

(1) An application to swap longfin squid moratorium permits must be received by the Regional Administrator within one year of the Regional Administrator's final decision on the issuance of the longfin squid Tier 1 or Tier 2 moratorium permits to be exchanged;

(2) At the time of the application, the owner of record for both vessels and permits involved in the permit swap must be identical to the owner of record of the same two vessels issued the associated longfin squid/butterfish moratorium permits as of May 26, 2017;

(3) The length overall of the vessel upon which a longfin squid moratorium permit would be placed may not exceed the length overall associated with that individual permit's vessel baseline specifications by more than 10 percent; and

(4) The horsepower of the vessel upon which a longfin squid moratorium permit would be placed may not exceed the horsepower associated with that individual permit's vessel baseline specifications by more than 20 percent.

(J) Confirmation of permit history. See paragraph (a)(1)(i)(J) of this section.

(K) Abandonment or voluntary relinquishment of permits. See paragraph (a)(1)(i)(K) of this section.

(L) Restriction on permit splitting. See paragraph (a)(1)(i)(L) of this section.

(M) Appeal of permit denial.

(1) Eligibility. Any applicant eligible to apply for a longfin squid moratorium permit who is denied such permit by the Regional Administrator may appeal the denial to the Regional Administrator within 30 days of the notice of denial.

(2) Appeal review. Review of the Regional Administrator's decisions on longfin squid moratorium permit issuance will be conducted by the NOAA Fisheries National Appeals Office pursuant to the procedures set forth in 15 CFR part 906, unless otherwise modified by the procedures described here. The National Appeals Office shall make findings and submit its decision to the Regional Administrator and the applicant. The Regional Administrator will review the National Appeals Office decision and make a final decision regarding any appeal in accordance with 15 CFR 906.17. The Regional Administrator's decision is the final decision of the Department of Commerce.

(i) Appeal request. An appeal of the denial of an initial permit application must be made in writing and submitted to and received by the Regional Administrator or postmarked no later than 30 days after the denial of an initial longfin squid moratorium permit application. Upon receipt, the Regional Administrator shall forward each appeal request to the National Appeals Office. Appeals must be based on the grounds that the information used by the Regional Administrator in denying the original permit application was incorrect. Items subject to appeal include, but are not limited to, the accuracy of the amount of landings, the correct assignment of landings to a vessel and/or permit holder, and the issuance of a permit to a particular entity. The appeal request must state the specific grounds for the appeal, and include information to support the appeal. An appellant may request a hearing by including a concise statement raising genuine and substantial issues of a material fact or law that cannot be resolved based on the documentary evidence alone. An appellant may also request a letter of authorization (LOA), as described in paragraph (a)(5)(i)(M)(3) of this section, to continue to fish during an appeal. If the appeal of the denial of the permit application is not made within 30 days, the denial of the permit application shall constitute the final decision of the Department of Commerce. The appeal will not be reviewed without submission of information in support of the appeal.

(ii) Reconsideration. Should the National Appeals Office deny an appeal request submitted according to paragraph (a)(5)(i)(M)(2)(i) of this section, the applicant may request a reconsideration of the appeal by the National Appeals Office. A reconsideration request must be made in writing and submitted to the National Appeals Office within 10 days of that office's decision on the appeal, as instructed by the National Appeals Office.

(3) Status of vessels pending appeal. A vessel denied a longfin squid moratorium permit may fish for longfin squid while the decision on the appeal is pending within NMFS, provided that the denial has been appealed, the appeal is pending, and the vessel has on board an LOA from the Regional Administrator authorizing the vessel to fish under the longfin squid moratorium permit category for which the applicant has submitted an appeal. A request for an LOA must be made when submitting an appeal of the denial of the permit application. The Regional Administrator will issue such a letter for the pending period of any appeal. The LOA must be carried on board the vessel. If the appeal is finally denied, the Regional Administrator shall send a notice of final denial to the vessel owner; the authorizing letter becomes invalid 5 days after the receipt of the notice of denial, but no later than 10 days from the date of the letter of denial.

(ii) Illex squid and butterfish moratorium permits.

(A) Eligibility. To be eligible to apply for a moratorium permit to fish for and retain Illex squid or butterfish in excess of the incidental catch allowance in paragraph (a)(5)(iv) of this section in the EEZ, a vessel must have been issued an Illex squid or butterfish moratorium permit for the preceding year, be replacing a vessel that was issued a moratorium permit for the preceding year, or be replacing a vessel that was issued a confirmation of permit history. Beginning on [date 90 days after the date of publication of the final rule in theFederal Register], a vessel that was previously issued a longfin squid/butterfish moratorium permit during fishing year 2018 shall be automatically issued a separate butterfish moratorium permit.

(B) Application/renewal restriction. See paragraph (a)(1)(i)(B) of this section.

(C) Qualification restriction. See paragraph (a)(1)(i)(C) of this section.

(D) Change in ownership. See paragraph (a)(1)(i)(D) of this section.

(E) Replacement vessels. See paragraph (a)(1)(i)(E) of this section.

(F) Upgraded vessel. See paragraph (a)(1)(i)(F) of this section.

(G) Consolidation restriction. See paragraph (a)(1)(i)(G) of this section.

(H) Vessel baseline specifications. See paragraph (a)(3)(i)(H) of this section.

(I) [Reserved]

(J) Confirmation of permit history. See paragraph (a)(1)(i)(J) of this section.

(K) Abandonment or voluntary relinquishment of permits. See paragraph (a)(1)(i)(K) of this section.

(L) Restriction on permit splitting. See paragraph (a)(1)(i)(L) of this section.

(iii) Limited access Atlantic mackerel permits. (A) Vessel size restriction. A vessel of the United States is eligible for and may be issued an Atlantic mackerel permit to fish for, possess, or land Atlantic mackerel in or from the EEZ, except for any vessel that is greater than or equal to 165 ft (50.3 m) in length overall (LOA), or greater than 750 gross registered tons (680.4 mt), or the vessel's total main propulsion machinery is greater than 3,000 horsepower. Vessels that exceed the size or horsepower restrictions may seek to obtain an at-sea processing permit specified in § 648.6(a)(2)(i).

(B) Limited access mackerel permits. A vessel of the United States that fishes for, possesses, or lands more than 20,000 lb (9,072 kg) of mackerel per trip, except vessels that fish exclusively in state waters for mackerel, must have been issued and carry on board one of the limited access mackerel permits described in paragraphs (a)(5)(iii)(B)(1) through (3) of this section, including both vessels engaged in pair trawl operations.

(1) Tier 1 Limited Access Mackerel Permit. A vessel may fish for, possess, and land mackerel not subject to a trip limit, provided the vessel qualifies for and has been issued this permit, subject to all other regulations of this part.

(2) Tier 2 Limited Access Mackerel Permit. A vessel may fish for, possess, and land up to 135,000 lb (50 mt) of mackerel per trip, provided the vessel qualifies for and has been issued this permit, subject to all other regulations of this part.

(3) Tier 3 Limited Access Mackerel Permit. A vessel may fish for, possess, and land up to 100,000 lb (37.3 mt) of mackerel per trip, provided the vessel qualifies for and has been issued this permit, subject to all other regulations of this part.

(C) Eligibility criteria for mackerel permits. To be eligible to apply for a Tier 1, Tier 2, or Tier 3 limited access mackerel permit to fish for and retain Atlantic mackerel in excess of the incidental catch allowance in paragraph (a)(5)(vi) of this section in the EEZ, a vessel must have been issued a Tier 1, Tier 2, or Tier 3 limited access mackerel permit, as applicable, for the preceding year, be replacing a vessel that was issued a limited access permit for the preceding year, or be replacing a vessel that was issued a confirmation of permit history.

(D) Application/renewal restrictions. See paragraph (a)(1)(i)(B) of this section.

(E) Qualification restrictions. (1) See paragraph (a)(1)(i)(C) of this section.

(F) Change of ownership. See paragraph (a)(1)(i)(D) of this section.

(G) Replacement vessels. See paragraph (a)(1)(i)(E) of this section.

(H) Vessel baseline specification. (1) In addition to the baseline specifications specified in paragraph (a)(1)(i)(H) of this section, the volumetric fish hold capacity of a vessel at the time it was initially issued a Tier 1 or Tier 2 limited access mackerel permit will be considered a baseline specification. The fish hold capacity measurement must be certified by one of the following qualified individuals or entities: an individual credentialed as a Certified Marine Surveyor with a fishing specialty by the National Association of Marine Surveyors (NAMS); an individual credentialed as an Accredited Marine Surveyor with a fishing specialty by the Society of Accredited Marine Surveyors (SAMS); employees or agents of a classification society approved by the Coast Guard pursuant to 46 U.S.C. 3316(c); the Maine State Sealer of Weights and Measures; a professionally-licensed and/or registered Marine Engineer; or a Naval Architect with a professional engineer license. The fish hold capacity measurement submitted to NMFS as required in this paragraph (a)(5)(iii)(H)(1) must include a signed certification by the individual or entity that completed the measurement, specifying how they meet the definition of a qualified individual or entity.

(2) If a mackerel CPH is initially issued, the vessel that provided the CPH eligibility establishes the size baseline against which future vessel size limitations shall be evaluated, unless the applicant has a vessel under contract prior to the submission of the mackerel limited access application. If the vessel that established the CPH is less than 20 ft (6.09 m) in length overall, then the baseline specifications associated with other limited access permits in the CPH suite will be used to establish the mackerel baseline specifications. If the vessel that established the CPH is less than 20 ft (6.09 m) in length overall, the limited access mackerel eligibility was established on another vessel, and there are no other limited access permits in the CPH suite, then the applicant must submit valid documentation of the baseline specifications of the vessel that established the eligibility. The hold capacity baseline for such vessels will be the hold capacity of the first replacement vessel after the permits are removed from CPH. Hold capacity for the replacement vessel must be measured pursuant to paragraph (a)(5)(iii)(H)(1) of this section.

(I) Upgraded vessel. See paragraph (a)(1)(i)(F) of this section. In addition, for Tier 1 and Tier 2 limited access mackerel permits, the replacement vessel's volumetric fish hold capacity may not exceed by more than 10 percent the volumetric fish hold capacity of the vessel's baseline specifications. The modified fish hold, or the fish hold of the replacement vessel, must be resurveyed by a surveyor (accredited as in paragraph (a)(5)(iii)(H) of this section) unless the replacement vessel already had an appropriate certification.

(J) Consolidation restriction. See paragraph (a)(1)(i)(G) of this section.

(K) Confirmation of permit history. See paragraph (a)(1)(i)(J) of this section.

(L) Abandonment or voluntary relinquishment of permits. See paragraph (a)(1)(i)(K) of this section.

(iv) Atlantic mackerel incidental catch permits. Any vessel of the United States may obtain a permit to fish for or retain up to 20,000 lb (9,072 kg) of Atlantic mackerel as an incidental catch in another directed fishery, provided that the vessel does not exceed the size restrictions specified in paragraph (a)(5)(iii)(A) of this section. The incidental catch allowance may be revised by the Regional Administrator based upon a recommendation by the Council following the procedure set forth in § 648.21.

(v) Party and charter boat permits. The owner of any party or charter boat must obtain a permit to fish for, possess, or retain in or from the EEZ mackerel, squid, or butterfish while carrying passengers for hire.

(vi) Squid/butterfish incidental catch permit. Any vessel of the United States may obtain a permit to fish for or retain up to 250 lb (113 kg) of longfin squid, 600 lb (272 kg) of butterfish, or up to 10,000 lb (4,536 kg) of Illex squid, as an incidental catch in another directed fishery. The incidental catch allowance may be revised by the Regional Administrator based upon a recommendation by the Council following the procedure set forth in § 648.22.

(1) Federally permitted dealers, and any individual acting in the capacity of a dealer, must submit to the Regional Administrator or to the official designee a detailed report of all fish purchased or received for a commercial purpose, other than solely for transport on land, within the time period specified in paragraph (f) of this section, by one of the available electronic reporting mechanisms approved by NMFS, unless otherwise directed by the Regional Administrator. The dealer reporting requirements specified in this paragraph (a)(1) for dealers purchasing or receiving for a commercial purpose Atlantic chub mackerel are effective through December 31, 2020. The following information, and any other information required by the Regional Administrator, must be provided in each report:

(i) Required information. All dealers issued a dealer permit under this part must provide: Dealer name; dealer permit number; name and permit number or name and hull number (USCG documentation number or state registration number, whichever is applicable) of vessel(s) from which fish are purchased or received; trip identifier for each trip from which fish are purchased or received from a commercial fishing vessel permitted under this part; date(s) of purchases and receipts; units of measure and amount by species (by market category, if applicable); price per unit by species (by market category, if applicable) or total value by species (by market category, if applicable); port landed; cage tag numbers for surfclams and ocean quahogs, if applicable; disposition of the seafood product; and any other information deemed necessary by the Regional Administrator. If no fish are purchased or received during a reporting week, a report so stating must be submitted.

(ii) Exceptions. The following exceptions apply to reporting requirements for dealers permitted under this part:

(A) Inshore Exempted Species, as defined in § 648.2, are not required to be reported under this part;

(B) When purchasing or receiving fish from a vessel landing in a port located outside of the Greater Atlantic Region (Maine, New Hampshire, Massachusetts, Connecticut, Rhode Island, New York, New Jersey, Pennsylvania, Maryland, Delaware, Virginia and North Carolina), only purchases or receipts of species managed by the Greater Atlantic Region under this part, and American lobster, managed under part 697 of this chapter, must be reported. Other reporting requirements may apply to those species not managed by the Northeast Region, which are not affected by this provision; and

(C) Dealers issued a permit for Atlantic bluefin tuna under part 635 of this chapter are not required to report their purchases or receipts of Atlantic bluefin tuna under this part. Other reporting requirements, as specified in § 635.5 of this chapter, apply to the receipt of Atlantic bluefin tuna.

(b) * * *

(3) * * *

(iii) Longfin squid moratorium permit owners or operators. The owner or operator of a vessel issued a longfin squid moratorium permit must report catch (retained and discarded) of longfin squid daily via VMS, unless exempted by the Regional Administrator. The report must include at least the following information, and any other information required by the Regional Administrator: Fishing Vessel Trip Report serial number; month, day, and year longfin squid was caught; total pounds longfin squid retained and total pounds of all fish retained. Daily longfin squid VMS catch reports must be submitted in 24-hr intervals for each day and must be submitted by 0900 hr on the following day. Reports are required even if longfin squid caught that day have not yet been landed. This report does not exempt the owner or operator from other applicable reporting requirements of this section.

(f) * * *

(2) * * *

(i) For any vessel not issued a NE multispecies; Atlantic herring permit; or any Atlantic mackerel, longfin squid, Illex squid, or butterfish permit; fishing vessel log reports, required by paragraph (b)(1)(i) of this section, must be postmarked or received by NMFS within 15 days after the end of the reporting month. For any vessel issued a NE multispecies permit; Atlantic herring permit; or any Atlantic mackerel, longfin squid, Illex squid, or butterfish permit; fishing vessel log reports must be postmarked or received by midnight of the first Tuesday following the end of the reporting week. For the purposes of this paragraph (f)(2)(i), the date when fish are offloaded will establish the reporting week or month the VTR must be submitted to NMFS, as appropriate.

(i) A vessel subject to the VMS requirements of § 648.9 and paragraphs (b) through (d) of this section that has crossed the VMS Demarcation Line under paragraph (a) of this section is deemed to be fishing under the DAS program, the Access Area Program, the LAGC IFQ or NGOM scallop fishery, or other fishery requiring the operation of VMS as applicable, unless prior to leaving port, the vessel's owner or authorized representative declares the vessel out of the scallop, NE multispecies, monkfish, or any other fishery, as applicable, for a specific time period. NMFS must be notified by transmitting the appropriate VMS code through the VMS, or unless the vessel's owner or authorized representative declares the vessel will be fishing in the Eastern U.S./Canada Area, as described in § 648.85(a)(3)(ii), under the provisions of that program.

(o) Longfin squid VMS notification requirement. A vessel issued a Tier 1 or Tier 2 longfin squid moratorium permit intending to harvest, possess, or land more than 2,500 lb (1.13 mt) of longfin squid on that trip must notify NMFS by declaring a longfin squid trip before leaving port at the start of each trip.

(p) Illex squid VMS notification requirement. A vessel issued an Illex squid moratorium permit intending to harvest, possess, or land 10,000 lb (4,536 kg) or more of Illex squid on that trip must notify NMFS by declaring an Illex squid trip before leaving port at the start of each trip.

(2) Sampling requirements for limited access Atlantic mackerel or Tier 1 or 2 longfin squid, or butterfish moratorium permit holders. In addition to the requirements in paragraphs (d)(1) through (7) of this section, an owner or operator of a vessel issued a limited access Atlantic mackerel or a longfin squid or butterfish moratorium permit on which a NMFS-approved observer is embarked must provide observers:

(3) * * *

(i) No vessel issued a limited access Atlantic mackerel permit or a longfin squid or butterfish moratorium permit may slip catch, as defined at § 648.2, except in the following circumstances:

(A) The vessel operator has determined, and the preponderance of available evidence indicates that, there is a compelling safety reason; or

(B) A mechanical failure, including gear damage, precludes bringing some or all of the catch on board the vessel for sampling and inspection; or

(C) The vessel operator determines that pumping becomes impossible as a result of spiny dogfish clogging the pump intake. The vessel operator shall take reasonable measures, such as strapping and splitting the net, to remove all fish that can be pumped from the net prior to release.

(ii) If a vessel issued any limited access Atlantic mackerel permit slips catch, the vessel operator must report the slippage event on the Atlantic mackerel and longfin squid daily VMS catch report and indicate the reason for slipping catch. Additionally, for a vessel issued a limited Atlantic mackerel permit or a longfin squid or butterfish moratorium permit, the vessel operator must complete and sign a Released Catch Affidavit detailing: The vessel name and permit number; the VTR serial number; where, when, and the reason for slipping catch; the estimated weight of each species brought on board or slipped on that tow. A completed affidavit must be submitted to NMFS within 48 hr of the end of the trip.

(a) Vessels issued a longfin squid, butterfish, or Illex squid moratorium permit and vessels issued a squid/butterfish incidental catch permit may transfer or attempt to transfer or receive longfin squid, Illex squid, or butterfish only if authorized in writing by the Regional Administrator through the issuance of a letter of authorization (LOA).

(i) Possession and landing. Take and retain, possess, or land more Atlantic mackerel, squid or butterfish than specified under, or after the effective date of, a notification issued under §§ 648.22 or 648.24(d).

(ii) * * *

(B) Transfer longfin squid, Illex squid, or butterfish within the EEZ, unless the vessels participating in the transfer have been issued the appropriate LOA from the Regional Administrator along with a valid longfin squid, butterfish, or Illex squid moratorium permit and are transferring species for which the vessels are permitted, or a valid squid/butterfish incidental catch permit.

(2) * * *

(i) General requirement. Fail to comply with any measures implemented pursuant to Subpart B.

(D) Take and retain, possess, or land mackerel, squid, or butterfish in excess of a possession limit specified in § 648.26.

(F) Take and retain, possess, or land mackerel after a total closure specified under § 648.24(b)(1).

(H) Possess more than the incidental catch allowance of butterfish, unless issued a butterfish moratorium permit.

(iii) * * *

(A) Fish with or possess nets or netting that do not meet the gear requirements for Atlantic mackerel, longfin squid, Illex squid, or butterfish specified in § 648.23(a); or that are modified, obstructed, or constricted, if subject to the minimum mesh requirements, unless the nets or netting are stowed and not available for immediate use as defined in § 648.2 or the vessel is fishing under an exemption specified in § 648.23(a)(5).

(A) Fail to declare via VMS into the directed mackerel, longfin squid,, or Illex squid fisheries by entering the fishery code prior to leaving port at the start of each trip if the vessel will harvest, possess, or land more than an incidental catch of Atlantic mackerel, longfin squid, or Illex squid and is issued a Limited Access Atlantic mackerel permit, Tier 1 or Tier 2 longfin squid moratorium permit, or Illex squid moratorium permit.

(vi) Slip catch, as defined at § 648.2, unless for one of the reasons specified at § 648.11(n)(3)(i) if issued a limited access Atlantic mackerel permit, or a longfin squid or a butterfish moratorium permit.

(a) Initial recommended annual specifications. The Atlantic Mackerel, Squid, and Butterfish Monitoring Committee (Monitoring Committee) shall meet annually to develop and recommend the following specifications for consideration by the Squid, Mackerel, and Butterfish Committee of the MAFMC:

(1) Illex squid—Initial OY (IOY), including Research Set-Aside (RSA), domestic annual harvest (DAH), and domestic annual processing (DAP) for Illex squid, which, subject to annual review, may be specified for a period of up to 3 years;

(2) Butterfish—ACL; ACT including RSA, DAH, DAP; bycatch level of the total allowable level of foreign fishing (TALFF), if any; and butterfish mortality cap for the longfin squid fishery for butterfish; which, subject to annual review, may be specified for a period of up to 3 years;

(3) Atlantic mackerel—ACL; commercial ACT, including RSA, DAH, mackerel Tier 3 allocation (up to 7 percent of the DAH), DAP; joint venture processing (JVP) if any; TALFF, if any; and recreational ACT, including RSA for mackerel; which, subject to annual review, may be specified for a period of up to 3 years. The Monitoring Committee may also recommend that certain ratios of TALFF, if any, for mackerel to purchases of domestic harvested fish and/or domestic processed fish be established in relation to the initial annual amounts.

(4) Longfin squid -

(i) IOY, including RSA, DAH, and DAP for longfin squid, which, subject to annual review, may be specified for a period of up to 3 years; and

(ii) Inseason adjustment, upward or downward, to the specifications for longfin squid, as specified in paragraph (e) of this section.

(3) The amount of longfin squid, Illex squid, and butterfish that may be retained and landed by vessels issued the incidental catch permit specified in § 648.4(a)(5)(vi), and the amount of mackerel that may be retained, possessed and landed by any of the limited access mackerel permits described at § 648.4(a)(5)(iii) and the incidental mackerel permit at § 648.4(a)(5)(iv).

(i) If NMFS concurs with the MAFMC's recommended management measures and determines that the recommended management measures should be issued as a final rule based on the factors specified in paragraph (a)(3) of this section, the measures will be issued as a final rule in the Federal Register.

(1) Directed fishery. A vessel must be issued a valid longfin squid moratorium permit to fish for, possess, or land more than 250 lb (113 kg) of longfin squid from or in the EEZ per trip. Unless the directed fishery is closed pursuant to paragraph § 648.24(a)(1), the following longfin squid possession limits apply:

(ii) Tier 2 moratorium permits. A vessel issued a Tier 2 longfin squid moratorium permit may not fish for, possess, or land more than 5,000 lb (2,268 kg) of longfin squid per trip, and may only land longfin squid once on any calendar day.

(iii) Tier 3 moratorium permits. A vessel issued a Tier 3 longfin squid moratorium permit may not fish for, possess, or land more than 2,500 lb (1,134 kg) of longfin squid per trip, and may only land longfin squid once on any calendar day.

(2) Incidental fishery.

(i) A vessel issued an open access squid/butterfish incidental catch permit may not fish for, possess, or land more than 250 lb (113 kg) of longfin squid from or in the EEZ per trip, and may only land longfin squid once on any calendar day.

(ii) During a closure of the directed longfin squid fishery in either Trimester I or III pursuant to paragraph § 648.24(a)(1), a vessel may not fish for, possess, or land more than 2,500 lb (1,134 kg) of longfin squid at any time per trip, and may only land longfin squid once on any calendar day.

(iii) Unless otherwise specified in paragraph (b)(2)(iv) of this section, during a closure of the directed longfin squid fishery in Trimester II pursuant to § 648.24(a)(1), a vessel may not fish for, possess, or land more than 250 lb (113 kg) of longfin squid at any time per trip, and may only land longfin squid once on any calendar day.

(iv) During a closure of the directed longfin squid fishery in Trimester II, a vessel issued either a Tier 1 or Tier 2 longfin squid moratorium permit may possess more than 250 lb (113 kg) of longfin squid per trip, provided the following conditions are met:

(A) The vessel operator has declared into the directed Illex squid fishery via VMS, as specified in § 648.10;

(B) The vessel is seaward of the coordinates specified at § 648.23(a)(5);

(C) The vessel possesses more than 10,000 lb (4,536 kg) of Illex squid on board;

(E) All fishing gear is stowed and rendered not available for immediate use, as defined in § 648.2, once the vessel is landward of the coordinates specified at § 648.23(a)(5).

(c) Illex squid.

(1) Directed fishery. A vessel must be issued a valid Illex squid moratorium permit to fish for, possess, or land more than 10,000 lb (4,536 kg) of Illex squid from or in the EEZ per trip. Unless the directed fishery is closed pursuant to paragraph § 648.24(a)(2), a vessel issued an Illex moratorium permit may possess an unlimited amount of Illex squid per trip.

(2) Incidental fishery. A vessel may not fish for, possess, or land more than 10,000 lb (4,536 kg) of Illex squid per trip at any time, and may only land Illex squid once on any calendar day if:

(i) A vessel is issued an open access squid/butterfish incidental catch permit; or

(ii) A vessel is issued an Illex moratorium permit and the directed fishery is closed pursuant to paragraph § 648.24(a)(2).

(d) Butterfish. Any vessel issued a butterfish permit under this part may only land butterfish once on any calendar day.

(1) Directed fishery. A vessel must be issued a butterfish moratorium permit to fish for, possess, or land more than 600 lb (272 kg) of butterfish per trip.

(i) Vessels fishing with larger mesh. A vessel issued a butterfish moratorium permit fishing with a minimum mesh size of 3 inches (76 mm) is authorized to fish for, possess, or land butterfish with no possession restriction in the EEZ per trip, provided that directed butterfish fishery has not been closed and the reduced possession limit has not been implemented, as specified in § 648.24(c)(1). When butterfish harvest is projected to reach the threshold for the butterfish fishery, as specified in § 648.24(c)(1), these vessels may not fish for, possess, or land more than 5,000 lb (2,268 kg) of butterfish per trip at any time. When butterfish harvest is projected to reach the DAH limit, as specified in § 648.24(c)(1), these vessels may not fish for, possess, or land more than 600 lb (272 kg) of butterfish per trip at any time.

(ii) Vessels fishing with smaller mesh. A vessel issued a butterfish moratorium permit fishing with mesh less than 3 inches (76 mm) may not fish for, possess, or land more than 5,000 lb (2,268 kg) of butterfish per trip at any time, provided that butterfish harvest has not reached the DAH limit and the reduced possession limit has not been implemented, as described in § 648.24(c)(1). When butterfish harvest is projected to reach the DAH limit, as described in § 648.24(c)(1), these vessels may not fish for, possess, or land more than 600 lb (272 kg) of butterfish per trip at any time.

(2) Incidental fishery. A vessel issued a squid/butterfish incidental catch permit, regardless of mesh size used, may not fish for, possess, or land more than 600 lb (272 kg) of butterfish per trip at any.

We are advising the public of our decision to concur with the World Organization for Animal Health's (OIE) bovine spongiform encephalopathy (BSE) risk designations for four regions. The OIE recognizes these regions as being of negligible risk for BSE. We are taking this action based on our review of information supporting the OIE's risk designations for these regions.

The regulations in 9 CFR part 92 subpart B, “Importation of Animals and Animal Products; Procedures for Requesting BSE Risk Status Classification With Regard To Bovines” (referred to below as the regulations), set forth the process by which the Animal and Plant Health Inspection Service (APHIS) classifies regions for bovine spongiform encephalopathy (BSE) risk. Section 92.5 of the regulations provides that all countries of the world are considered by APHIS to be in one of three BSE risk categories: Negligible risk, controlled risk, or undetermined risk. These risk categories are defined in § 92.1. Any region that is not classified by APHIS as presenting either negligible risk or controlled risk for BSE is considered to present an undetermined risk. The list of those regions classified by APHIS as having either negligible risk or controlled risk can be accessed on the APHIS website at https://www.aphis.usda.gov/aphis/ourfocus/animalhealth/animal-and-animal-product-import-information/animal-health-status-of-regions. The list can also be obtained by writing to APHIS at National Import Export Services, 4700 River Road Unit 38, Riverdale, MD 20737.

Under the regulations, APHIS may classify a region for BSE in one of two ways. One way is for regions that have not received a risk classification from the World Organization for Animal Health (OIE) to request classification by APHIS. The other way is for APHIS to concur with the classification given to a country or region by the OIE.

If the OIE has recognized a country as either BSE negligible risk or BSE controlled risk, APHIS will seek information to support our concurrence with the OIE classification. This information may be publicly available information, or APHIS may request that countries supply the same information given to the OIE. APHIS will announce in the Federal Register, subject to public comment, its intent to concur with an OIE classification.

In accordance with that process, we published a notice 1 in the Federal Register on April 24, 2018 (83 FR 17789, Docket No. APHIS-2018-0012), in which we announced our intent to concur with the OIE recognition of Croatia, Poland, Northern Ireland, and Scotland as being regions of negligible risk for BSE. We solicited comments on the notice for 60 days ending on June 25, 2018. We received one comment by that date, from a private citizen.

1 To view the notice and the comment we received, go to http://www.regulations.gov/#!docketDetail;D=APHIS-2018-0012.

The commenter voiced doubts about the efficacy of the BSE minimal risk region policy, concerns about other prion diseases such as chronic wasting disease circulating in the United States and the world, and skepticism that the ruminant-to-ruminant feed ban has been effectively enforced. The commenter did not, however, address our preliminary concurrence with the OIE's risk designations for the four regions or the documentation made available to support that action.

Therefore, in accordance with the regulations in § 92.5, we are announcing our decision to concur with the OIE risk classifications of the following countries:

• Regions of negligible risk for BSE: Croatia, Poland, Northern Ireland (region of United Kingdom), and Scotland (region of United Kingdom).

In accordance with the Paperwork Reduction Act of 1995 this notice announces the intention of the National Agricultural Statistics Service (NASS) to request revision and extension of a currently approved information collection, the Stocks Reports. Revision to burden hours will be needed due to changes in the size of the target population, sampling design, and/or questionnaire length.

DATES:

Comments on this notice must be received by October 30, 2018 to be assured of consideration.

ADDRESSES:

You may submit comments, identified by docket number 0535-0007, by any of the following methods:

• Email: OMBofficer@nass.usda.gov. Include docket number above in the subject line of the message.

Kevin L. Barnes, Associate Administrator, National Agricultural Statistics Service, U.S. Department of Agriculture, (202) 720-2707. Copies of this information collection and related instructions can be obtained without charge from David Hancock, NASS—OMB Clearance Officer, at (202) 690-2388 or at ombofficer@nass.usda.gov.

SUPPLEMENTARY INFORMATION:

Title: Stocks Reports.

OMB Control Number: 0535-0007.

Expiration Date of Approval: January 31, 2019.

Type of Request: Intent to Seek Approval to Revise and Extend an Information Collection for 3 years.

Abstract: The primary objective of the National Agricultural Statistics Service is to prepare and issue State and national estimates of crop and livestock production, stocks, disposition, and prices. The Stocks Report surveys, provide estimates of stocks of grains, hops, oilseeds, peanuts, potatoes, and rice that are stored off-farm. These off-farm stocks are combined with on-farm stocks to estimate stocks in all positions. The grain Stocks Reports are a principle economic indicator as defined by OMB. Stocks statistics are used by the U.S. Department of Agriculture to help administer programs; by State agencies to develop, research, and promote the marketing of products; and by producers and buyers to find their best market opportunity(s). The Stocks Reports are instrumental in providing timely, accurate data to help grain market participants. Since the previous approval, NASS has made several adjustments to the number of respondents contacted and the overall respondent burden. The largest adjustment to sample size is for the off-farm grain and oilseed operations that has been decreased by approximately 600 operations (quarterly), due to numerous mergers of operations over the last three years.

The current expiration date for this docket is January 31, 2019. NASS intends to request that the survey be approved for another 3 years.

Authority: These data will be collected under the authority of 7 U.S.C. 2204(a). Individually identifiable data collected under this authority are governed by Section 1770 of the Food Security Act of 1985 as amended, 7 U.S.C. 2276, which requires USDA to afford strict confidentiality to non-aggregated data provided by respondents. This Notice is submitted in accordance with the Paperwork Reduction Act of 1995, Public Law 104-13 (44 U.S.C. 3501, et seq.), and Office of Management and Budget regulations at 5 CFR part 1320.

Estimate of Burden: This information collection comprises 14 individual surveys that are conducted either 1, 4, 5, or 12 times a year for an estimated total of 24,700 responses. Average reporting burden for this collection of information ranges from 10 to 25 minutes per response.

Respondents: Farms and businesses.

Estimated Number of Respondents: 6,300.

Estimated Total Annual Burden on Respondents: 5,300 hours.

Comments: Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on those who are to respond, through the use of appropriate automated, electronic, mechanical, technological, or other forms of information technology collection methods.

All responses to this notice will become a matter of public record and be summarized in the request for OMB approval.

In accordance with the Paperwork Reduction Act of 1995, this notice announces the intention of the National Agricultural Statistics Service (NASS) to request revision and extension of a currently approved information collection, the Egg, Chicken, and Turkey Surveys. A revision to burden hours will be needed due to changes in the size of the target population, sampling design, and/or questionnaire length.

DATES:

Comments on this notice must be received by October 30, 2018 to be assured of consideration.

ADDRESSES:

You may submit comments, identified by docket number 0535-0004, by any of the following methods:

• Email: ombofficer@nass.usda.gov. Include docket number above in the subject line of the message.

Kevin L. Barnes, Associate Administrator, National Agricultural Statistics Service, U.S. Department of Agriculture, (202) 720-2707. Copies of this information collection and related instructions can be obtained without charge from David Hancock, NASS—OMB Clearance Officer, at (202) 690-2388 or at ombofficer@nass.usda.gov.

SUPPLEMENTARY INFORMATION:

Title: Egg, Chicken, and Turkey Surveys.

OMB Number: 0535-0004.

Expiration Date of Approval: January 31, 2019.

Type of Request: Intent to seek approval to revise and extend an information collection for 3 years.

Abstract: The primary objective of the National Agricultural Statistics Service is to prepare and issue State and national estimates of crop and livestock production, prices, and disposition. The Egg, Chicken, and Turkey Surveys obtain basic poultry statistics from voluntary cooperators throughout the Nation. Statistics are published on placement of pullet chicks for hatchery supply flocks; hatching reports for broiler-type, egg-type, and turkey eggs; number of layers on hand; total table egg production; and production and value estimates for eggs, chickens, and turkeys. The frequencies of the surveys being conducted include weekly, monthly, and annually. This information is used by producers, processors, feed dealers, and others in marketing and supply channels as a basis for production and marketing decisions. Government agencies use these estimates to evaluate poultry product supplies. The information is an important consideration in government purchases for the National School Lunch Program and in formulation of export-import policy. The current expiration date for this docket is January 31, 2019. NASS intends to request that the surveys be approved for another 3 years.

Authority: These data will be collected under the authority of 7 U.S.C. 2204(a). Individually identifiable data collected under this authority are governed by section 1770 of the Food Security Act of 1985 as amended, 7 U.S.C. 2276, which requires USDA to afford strict confidentiality to non-aggregated data provided by respondents. This notice is submitted in accordance with the Paperwork Reduction Act of 1995, Public Law 104-13 (44 U.S.C. 3501, et seq.), and Office of Management and Budget regulations at 5 CFR part 1320.

Estimate of Burden: Public reporting burden for this collection of information is estimated between 8 and 35 minutes per respondent per survey. Additional burden is allowed for the inclusion of publicity materials and instructions on how to respond to the surveys via the internet.

Respondents: Farmers, ranchers, farm managers, and farm contractors.

Estimated Number of Respondents: 2,500.

Estimated Total Annual Burden on Respondents: 2,900 hours. This will include burden for both the initial mailing and phone follow-up to non-respondents, as well as publicity and instruction materials mailed out with questionnaires.

Comments: Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on those who are to respond, through the use of appropriate automated, electronic, mechanical, technological, or other forms of information technology collection methods.

All responses to this notice will become a matter of public record and be summarized in the request for OMB approval.

The United States Department of Agriculture (USDA) Rural Utilities Service (RUS) administers rural utilities programs, including the Telecommunications Program. RUS announces the depreciation rates for telecommunications plant for the period ending December 31, 2017.

DATES:

These rates are applicable immediately and will remain in effect until rates are available for the period ending December 31, 2018.

In 7 CFR part 1737, Pre-Loan Policies and Procedures Common to Insured and Guaranteed Telecommunications Loans, § 1737.70(e) explains the depreciation rates that are used by RUS in its feasibility studies. § 1737.70(e)(2) refers to median depreciation rates published by RUS for all borrowers. The following chart provides those rates, compiled by RUS, for the reporting period ending December 31, 2017:

Median Depreciation Rates of Rural Utilities Service Borrowers by Equipment Category for Period Ending December 31, 2017Telecommunications

The Broadcasting Board of Governors (Board) will be meeting at the time and location listed above. The Board will vote on a consent agenda consisting of the minutes of its June 6, 2018 meeting and a resolution honoring the 55th anniversary of Voice of America's English to Africa Service. The Board will receive a report from the Chief Executive Officer and Director of BBG.

This meeting will be available for public observation via streamed webcast, both live and on-demand, on the agency's public website at www.bbg.gov. Information regarding this meeting, including any updates or adjustments to its starting time, can also be found on the agency's public website.

The public may also attend this meeting in person at the address listed above as seating capacity permits. Members of the public seeking to attend the meeting in person must register at https://bbgboardmeetingsept2018.eventbrite.com by 12:00 p.m. (ET) on September 4. For more information, please contact BBG Public Affairs at (202) 203-4400 or by email at pubaff@bbg.gov.

CONTACT PERSON FOR MORE INFORMATION:

Persons interested in obtaining more information should contact Oanh Tran at (202) 203-4545.

The Department of Commerce (DOC) announces the appointment of those individuals who have been selected to serve as members of the Departmental Performance Review Board. The Performance Review Board is responsible for reviewing performance appraisals and ratings of Senior Executive Service (SES) members and making recommendations to the appointing authority on other performance management issues, such as pay adjustments, bonuses and Presidential Rank Awards. The appointment of these members to the Performance Review Board will be for a period of twenty-four (24) months.

DATES:

The period of appointment for those individuals selected for the Departmental Performance Review Board begins on August 31, 2018.

In accordance with 5 U.S.C. 4314(c)(4), the Department of Commerce (DOC), announces the appointment of those individuals who have been selected to serve as members of the Departmental Performance Review Board. The Performance Review Board is responsible for (1) reviewing performance appraisals and ratings of Senior Executive Service (SES) members and (2) making recommendations to the appointing authority on other performance management issues, such as pay adjustments, bonuses and Presidential Rank Awards. The appointment of these members to the Performance Review Board will be for a period of twenty-four (24) months.

The name, position title, and type of appointment of each member of the Performance Review Board are set forth below:

An application has been submitted to the Foreign-Trade Zones (FTZ) Board by the Koochiching Economic Development Authority, grantee of FTZ 259, requesting subzone status for the facilities of Digi-Key Corporation, located in Thief River Falls, Minnesota. The application was submitted pursuant to the provisions of the Foreign-Trade Zones Act, as amended (19 U.S.C. 81a-81u), and the regulations of the FTZ Board (15 CFR part 400). It was formally docketed on August 24, 2018.

The proposed subzone would consist of the following sites: Site 1 (130.7 acres) 701 Brooks Avenue, Thief River Falls, Pennington County; and Site 2 (4.19 acres) 121 Arnold Avenue, Thief River Falls, Pennington County. A notification of proposed production activity has been submitted and will be published separately for public comment under 15 CFR 400.37. The proposed subzone would be subject to the existing activation limit of FTZ 259.

In accordance with the FTZ Board's regulations, Elizabeth Whiteman of the FTZ Staff is designated examiner to review the application and make recommendations to the Executive Secretary.

Public comment is invited from interested parties. Submissions shall be addressed to the FTZ Board's Executive Secretary at the address below. The closing period for their receipt is October 10, 2018. Rebuttal comments in response to material submitted during the foregoing period may be submitted during the subsequent 15-day period to October 25, 2018.

A copy of the application will be available for public inspection at the Office of the Executive Secretary, Foreign-Trade Zones Board, Room 21013, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230-0002, and in the “Reading Room” section of the FTZ Board's website, which is accessible via www.trade.gov/ftz.

For further information, contact Elizabeth Whiteman at Elizabeth.Whiteman@trade.gov or (202) 482-0473.

The Transportation and Related Equipment Technical Advisory Committee will meet on September 26, 2018, 9:30 a.m., in the Herbert C. Hoover Building, Room 3884, 14th Street between Constitution & Pennsylvania Avenues NW, Washington, DC. The Committee advises the Office of the Assistant Secretary for Export Administration with respect to technical questions that affect the level of export controls applicable to transportation and related equipment or technology.

AgendaPublic Session

1. Welcome and Introductions.

2. Status reports by working group chairs.

3. Public comments and Proposals.

Closed Session

4. Discussion of matters determined to be exempt from the provisions relating to public meetings found in 5 U.S.C. app. 2 §§ 10(a)(1) and 10(a)(3).

The open session will be accessible via teleconference to 20 participants on a first come, first serve basis. To join the conference, submit inquiries to Ms. Yvette Springer at Yvette.Springer@bis.doc.gov no later than September 19, 2018.

A limited number of seats will be available during the public session of the meeting. Reservations are not accepted. To the extent time permits, members of the public may present oral statements to the Committee. The public may submit written statements at any time before or after the meeting. However, to facilitate distribution of public presentation materials to Committee members, the Committee suggests that presenters forward the public presentation materials prior to the meeting to Ms. Springer via email.

The Assistant Secretary for Administration, with the concurrence of the delegate of the General Counsel, formally determined on August 24, 2018, pursuant to Section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. app. 2 § (10)(d)), that the portion of the meeting dealing with pre-decisional changes to the Commerce Control List and U.S. export control policies shall be exempt from the provisions relating to public meetings found in 5 U.S.C. app. 2 §§ 10(a)(1) and 10(a)(3). The remaining portions of the meeting will be open to the public.

Enforcement and Compliance, International Trade Administration, Department of Commerce.

SUMMARY:

Based on affirmative final determinations by the Department of Commerce (Commerce) and the International Trade Commission (ITC), Commerce is issuing a countervailing duty order on cast iron soil pipe fittings (soil pipe fittings) from the People's Republic of China (China).

On July 11, 2018, Commerce published its final determination in the countervailing duty investigation of soil pipe fittings from China.1 On August 22, 2018, the ITC notified Commerce of its final determination, pursuant to section 705(d) of the Act, that an industry in the United States is materially injured within the meaning of section 705(b)(1)(A)(i) of the Act, by reason of subsidized imports of soil pipe fittings from China.2

The merchandise covered by the scope of this order is cast iron soil pipe fittings, finished and unfinished, regardless of industry or proprietary specifications, and regardless of size. Cast iron soil pipe fittings are nonmalleable iron castings of various designs and sizes, including, but not limited to, bends, tees, wyes, traps, drains (other than drain bodies), and other common or special fittings, with or without side inlets.

Cast iron soil pipe fittings are classified into two major types—hubless and hub and spigot. Hubless cast iron soil pipe fittings are manufactured without a hub, generally in compliance with Cast Iron Soil Pipe Institute (CISPI) specification 301 and/or American Society for Testing and Materials (ASTM) specification A888. Hub and spigot pipe fittings have hubs into which the spigot (plain end) of the pipe or fitting is inserted. Cast iron soil pipe fittings are generally distinguished from other types of nonmalleable cast iron fittings by the manner in which they are connected to cast iron soil pipe and other fittings.

Excluded from this scope are all drain bodies. Drain bodies are normally classified in subheading 7326.90.86.88 of the Harmonized Tariff Schedule of the United States (HTSUS).

The cast iron soil pipe fittings subject to the scope of this order are normally classified in subheading 7307.11.0045 of the HTSUS: Cast fittings of nonmalleable cast iron for cast iron soil pipe. They may also be entered under HTSUS 7324.29.0000 and 7307.92.3010. The HTSUS subheadings and specifications are provided for convenience and customs purposes only; the written description of the scope of this order is dispositive.

Countervailing Duty Order

On August 22, 2018, in accordance with section 705(d) of the Act, the ITC notified Commerce of its final determination in this investigation, in which it found that imports of cast iron soil pipe fittings are materially injuring a U.S. industry. Therefore, in accordance with section 705(c)(2) of the Act, we are publishing this countervailing duty order. In its determination, the ITC found two domestic like products covered by the scope of the investigation: Drain bodies and all other soil pipe fittings. The ITC made a negative determination with respect to drain bodies and an affirmative determination with respect to all other soil pipe fittings. Because the ITC made different injury determinations for separate domestic like products, Commerce will instruct U.S. Customs and Border Protection (CBP) to assess countervailing duties on entries of all cast iron soil pipe fittings (subject merchandise) other than drain bodies (excluded merchandise).

Drain Bodies

The ITC found that drain bodies are a separate domestic like product. The Final ITC Report describes typical drain bodies as having only one side that connects to a pipe or fitting.3 Further, drain bodies are not classified as either hubless or hub and spigot.4 Drain bodies may be painted in a different manner than other cast iron soil pipe fittings, which are coated in asphaltic material, black paint, or epoxy.5 Drain bodies often require assembly with attachments (cast iron and non-cast iron) such as stainless steel strainers, grates, and bolts to be a drain fixture ready for use.6 In addition, the purpose of a drain body is to collect and carry away liquid or water, including wastewater, while the purpose of other cast iron soil pipe fittings is to connect pipe and fittings.7

Because the ITC made a negative determination of material injury with respect to drain bodies, Commerce will direct CBP to terminate the suspension of liquidation for entries of drain bodies from China entered, or withdrawn from warehouse, and refund any cash deposits with respect to these entries.

All Soil Pipe Fittings Other Than Drain Bodies

Because the ITC determined that imports of all cast iron soil pipe fittings other than drain bodies from China are materially injuring a U.S. industry, all unliquidated entries of subject merchandise from China, entered or withdrawn from warehouse, are subject to the assessment of countervailing duties.

As a result of the ITC's final determination, in accordance with section 706(a) of the Act, Commerce will direct CBP to assess, upon further instruction by Commerce, countervailing duties on unliquidated entries of subject merchandise from China entered, or withdrawn from warehouse, for consumption on or after December 19, 2017, the date on which Commerce published its preliminary countervailing duty determination in the Federal Register,8 and before April 18, 2018, the effective date on which Commerce instructed CBP to discontinue the suspension of liquidation in accordance with section 703(d) of the Act. Section 703(d) of the Act states that the suspension of liquidation pursuant to a preliminary determination may not remain in effect for more than four months. Therefore, entries of subject merchandise from China made on or after April 18, 2018, and prior to the date of publication of the ITC's final determination in the Federal Register are not liable for the assessment of countervailing duties due to Commerce's discontinuation of the suspension of liquidation.

In accordance with section 706 of the Act, Commerce will direct CBP to reinstitute the suspension of liquidation of subject merchandise (i.e., all soil pipe fittings other than drain bodies) from China, effective the date of publication of the ITC's notice of final determination in the Federal Register, and to assess, upon further instruction by Commerce pursuant to section 706(a)(1) of the Act, countervailing duties for each entry of the subject merchandise in an amount based on the net countervailable subsidy rates for the subject merchandise. On or after the date of publication of the ITC's final injury determination in the Federal Register, we will instruct CBP to require, at the same time as importers would normally deposit estimated duties on this merchandise, cash deposits for each entry of subject merchandise equal to the rates noted below. These instructions suspending liquidation will remain in effect until further notice. The all others rate applies to all producers or exporters not specifically listed, as appropriate.

This notice constitutes the countervailing duty order with respect to soil pipe fittings from China pursuant to section 706(a) of the Act. Interested parties may visit https://enforcement.trade.gov/stats/iastats1.html or contact Commerce's Central Records Unit, Room B8024 of the main Commerce Building, for copies of an updated list of countervailing duty orders currently in effect.

This order is issued and published in accordance with section 706(a) of the Act and 19 CFR 351.211(b).

Enforcement and Compliance, International Trade Administration, Department of Commerce.

SUMMARY:

The Department of Commerce (Commerce) preliminarily determines that cast iron soil pipe from the People's Republic of China (China) was sold to the United States at less than fair value (LTFV) during the period of investigation (POI), July 1, 2017, through December 31, 2017.

This preliminary determination is made in accordance with section 733(b) of the Tariff Act of 1930, as amended (the Act). Commerce published the notice of initiation of this investigation on February 23, 2018.1 On June 22, 2018, Commerce postponed the preliminary determination of this investigation and the revised deadline is now August 24, 2018.2

For a complete description of the events that followed the initiation of this investigation, see the Preliminary Decision Memorandum.3 A list of topics included in the Preliminary Decision Memorandum is included as Appendix II to this notice. The Preliminary Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at https://access.trade.gov, and to all parties in the Central Records Unit, Room B8024 of the main Department of Commerce building. In addition, a complete version of the Preliminary Decision Memorandum can be accessed directly at http://enforcement.trade.gov/frn/. The signed and the electronic versions of the Preliminary Decision Memorandum are identical in content.

The product covered by this investigation is cast iron soil pipe from China. For a complete description of the scope of this investigation, see Appendix I.

Scope Comments

In accordance with the preamble to Commerce's regulations,4 the Initiation Notice set aside a period of time for parties to raise issues regarding product coverage (scope).5 For a summary of the product coverage comments and rebuttal responses submitted to the record for this investigation, and accompanying discussion and analysis of all comments timely received, see the Preliminary Scope Memorandum.6 Commerce is not preliminarily modifying the scope language as it appeared in the Initiation Notice. See the scope in Appendix I to this notice.

Commerce is conducting this investigation in accordance with section 731 of the Act. Export price was calculated in accordance with sections 772(a) of the Act. Because China is a non-market economy within the meaning of section 771(18) of the Act, normal value was calculated in accordance with section 773(c) of the Act. Furthermore, pursuant to section 776(a) and (b) of the Act, we have preliminarily relied upon facts otherwise available, with adverse inferences, for Sibo International Ltd., and the China-wide entity. For a full description of the methodology underlying Commerce's preliminary determination, see the Preliminary Decision Memorandum.

Combination Rates

In the Initiation Notice,7 Commerce stated that it would calculate producer/exporter combination rates for the respondents that are eligible for a separate rate in this investigation. Policy Bulletin 05.1 describes this practice.8

9 For cash deposit purposes, we normally adjust for export subsidies found in companion CVD proceedings. However, we preliminary found no export subsidies in the companion CVD proceeding. See PDM at X.

In accordance with section 733(d)(2) of the Act, Commerce will direct U.S. Customs and Border Protection (CBP) to suspend liquidation of subject merchandise as described in the scope of the investigation section entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the Federal Register, as discussed below. Further, pursuant to section 733(d)(1)(B) of the Act and 19 CFR 351.205(d), Commerce will instruct CBP to require a cash deposit equal to the weighted-average amount by which normal value exceeds U.S. price, as indicated in the chart above as follows: (1) For the producer/exporter combinations listed in the table above, the cash deposit rate is equal to the estimated weighted-average dumping margin listed for that combination in the table; (2) for all combinations of Chinese producers/exporters of merchandise under consideration that have not established eligibility for their own separate rates, the cash deposit rate will be equal to the estimated weighted-average dumping margin established for the China-wide entity; and (3) for all third-county exporters of merchandise under consideration not listed in the table above, the cash deposit rate is the cash deposit rate applicable to the Chinese producer/exporter combination (or the China-wide entity) that supplied that third-country exporter.

To determine the cash deposit rate, Commerce normally adjusts the estimated weighted-average dumping margin by the amount of domestic subsidy pass-through and export subsidies determined in a companion countervailing duty (CVD) proceeding when CVD provisional measures are in effect. Accordingly, where Commerce makes a preliminary affirmative determination for domestic subsidy pass-through or export subsidies, Commerce offsets the calculated estimated weighted-average dumping margin by the appropriate rate(s). In this case, we have not made a preliminary affirmative determination for domestic subsidy pass-through or export subsidies. Therefore, we are not adjusting the estimated weighted-average dumping margin for these subsidies.

These suspension of liquidation instructions will remain in effect until further notice.

Disclosure

Commerce intends to disclose to interested parties the calculations performed in connection with this preliminary determination within five days of its public announcement or, if there is no public announcement, within five days of the date of publication of this notice in accordance with 19 CFR 351.224(b).

Verification

As provided in section 782(i)(1) of the Act, Commerce intends to verify information relied upon in making its final determination.

Public Comment

Case briefs or other written comments may be submitted to the Assistant Secretary for Enforcement and Compliance no later than seven days after the date on which the last final verification report is issued in this investigation. Rebuttal briefs, limited to issues raised in case briefs, may be submitted no later than five days after the deadline date for case briefs.10 Pursuant to 19 CFR 351.309(c)(2) and (d)(2), parties who submit case briefs or rebuttal briefs in this investigation are encouraged to submit with each argument: (1) A statement of the issue; (2) a brief summary of the argument; and (3) a table of authorities.

Pursuant to 19 CFR 351.310(c), interested parties who wish to request a hearing, limited to issues raised in the case and rebuttal briefs, must submit a written request to the Assistant Secretary for Enforcement and Compliance, U.S. Department of Commerce, within 30 days after the date of publication of this notice. Requests should contain the party's name, address, and telephone number, the number of participants, whether any participant is a foreign national, and a list of the issues to be discussed. If a request for a hearing is made, Commerce intends to hold the hearing at the U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230, at a time and date to be determined. Parties should confirm by telephone the date, time, and location of the hearing two days before the scheduled date.

Postponement of Final Determination and Extension of Provisional Measures

Section 735(a)(2) of the Act provides that a final determination may be postponed until not later than 135 days after the date of the publication of the preliminary determination if, in the event of an affirmative preliminary determination, a request for such postponement is made by exporters who account for a significant proportion of exports of the subject merchandise, or in the event of a negative preliminary determination, a request for such postponement is made by the petitioner. Pursuant to 19 CFR 351.210(e)(2), Commerce requires that requests by respondents for postponement of a final antidumping determination be accompanied by a request for extension of provisional measures from a four-month period to a period not more than six months in duration.

On August 2, 2018, pursuant to 19 CFR 351.210 (e), HengTong requested that Commerce postpone the final determination and that provisional measures be extended to a period not to exceed six months.11 In accordance with section 735(a)(2)(A) of the Act and 19 CFR 351.210(b)(2)(ii), because (1) the preliminary determination is affirmative; (2) the requesting exporter accounts for a significant proportion of exports of the subject merchandise; and (3) no compelling reasons for denial exist, Commerce is postponing the final determination and extending the provisional measures from a four-month period to a period not greater than six months. Accordingly, Commerce's final determination will publish no later than 135 days after the publication of this preliminary determination notice.

In accordance with section 733(f) of the Act, Commerce will notify the International Trade Commission (ITC) of its preliminary determination of sales at LTFV. If the final determination is affirmative, the ITC will determine before the later of 120 days after the date of this preliminary determination or 45 days after the final determination whether imports of the subject merchandise are materially injuring, or threaten material injury to, the U.S. industry.

Notification to Interested Parties

This determination is issued and published in accordance with sections 733(f) and 777(i)(1) of the Act and 19 CFR 351.205(c).

Dated: August 24, 2018.Gary Taverman,Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, performing the non-exclusive functions and duties of the Assistant Secretary for Enforcement and Compliance.Appendix IScope of the Investigation

The merchandise covered by this investigation is cast iron soil pipe, whether finished or unfinished, regardless of industry or proprietary specifications, and regardless of wall thickness, length, diameter, surface finish, end finish, or stenciling. The scope of this investigation includes, but is not limited to, both hubless and hub and spigot cast iron soil pipe. Cast iron soil pipe is nonmalleable iron pipe of various designs and sizes. Cast iron soil pipe is generally distinguished from other types of nonmalleable cast iron pipe by the manner in which it is connected to cast iron soil pipe fittings.

Cast iron soil pipe is classified into two major types—hubless and hub and spigot. Hubless cast iron soil pipe is manufactured without a hub, generally in compliance with Cast Iron Soil Pipe Institute (CISPI) specification 301 and/or American Society for Testing and Materials (ASTM) specification A888, including any revisions to those specifications. Hub and spigot pipe has one or more hubs into which the spigot (plain end) of a fitting is inserted. All pipe meeting the physical description set forth above is covered by the scope of this investigation, whether or not produced according to a particular standard.

The subject imports are currently classified in subheading 7303.00.0030 of the Harmonized Tariff Schedule of the United States (HTSUS): Cast iron soil pipe. The HTSUS subheading and specifications are provided for convenience and customs purposes only; the written description of the scope of this investigation is dispositive.

Appendix IIList of Topics Discussed in the Preliminary Decision MemorandumI. SummaryII. BackgroundIII. Period of InvestigationIV. Postponement of Final Determination and Extension of Provisional MeasuresV. Scope CommentsVI. Scope of the InvestigationVII. Discussion of the MethodologyA. Non-Market Economy CountryB. Surrogate Country and Surrogate Value CommentsC. Separate RatesD. China-Wide EntityE. Application of Facts Available and Adverse InferencesF. Date of SaleG. Comparisons to Fair Value